Correlation Between IShares Self and Simplify Volt

Can any of the company-specific risk be diversified away by investing in both IShares Self and Simplify Volt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares Self and Simplify Volt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Self Driving EV and Simplify Volt RoboCar, you can compare the effects of market volatilities on IShares Self and Simplify Volt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Self with a short position of Simplify Volt. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Self and Simplify Volt.

Diversification Opportunities for IShares Self and Simplify Volt

-0.26

Correlation Coefficient

IShares Self  Simplify Volt

Very good diversification

The 3 months correlation between IShares and Simplify is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding iShares Self Driving EV and Simplify Volt RoboCar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Volt RoboCar and IShares Self is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Self Driving EV are associated (or correlated) with Simplify Volt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Volt RoboCar has no effect on the direction of IShares Self i.e., IShares Self and Simplify Volt go up and down completely randomly.

Pair Corralation between IShares Self and Simplify Volt

Given the investment horizon of 90 days iShares Self Driving EV is expected to under-perform the Simplify Volt. But the etf apears to be less risky and, when comparing its historical volatility, iShares Self Driving EV is 2.09 times less risky than Simplify Volt. The etf trades about -0.02 of its potential returns per unit of risk. The Simplify Volt RoboCar is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  931.00  in Simplify Volt RoboCar on October 2, 2024 and sell it today you would earn a total of  1,498  from holding Simplify Volt RoboCar or generate 160.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

iShares Self Driving EV  vs.  Simplify Volt RoboCar

iShares Self Driving

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Self Driving EV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Simplify Volt RoboCar

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Volt RoboCar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Simplify Volt reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Self and Simplify Volt

The main advantage of trading using opposite IShares Self and Simplify Volt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Self position performs unexpectedly, Simplify Volt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Simplify Volt will offset losses from the drop in Simplify Volt's long position.

The idea behind iShares Self Driving EV and Simplify Volt RoboCar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.