Correlation Between T Rex and Simplify Exchange

Can any of the company-specific risk be diversified away by investing in both T Rex and Simplify Exchange 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 T Rex and Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T Rex 2X Long and Simplify Exchange Traded, you can compare the effects of market volatilities on T Rex and Simplify Exchange 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 T Rex with a short position of Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Simplify Exchange.

Diversification Opportunities for T Rex and Simplify Exchange

-0.68

Correlation Coefficient

T Rex  Simplify Exchange

Excellent diversification

The 3 months correlation between NVDX and Simplify is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and T Rex 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 T Rex 2X Long are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of T Rex i.e., T Rex and Simplify Exchange go up and down completely randomly.

Pair Corralation between T Rex and Simplify Exchange

Given the investment horizon of 90 days T Rex 2X Long is expected to under-perform the Simplify Exchange. In addition to that, T Rex is 23.26 times more volatile than Simplify Exchange Traded. It trades about -0.04 of its total potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.25 per unit of volatility. If you would invest  2,463  in Simplify Exchange Traded on December 1, 2024 and sell it today you would earn a total of  122.00  from holding Simplify Exchange Traded or generate 4.95% return on investment over 90 days.

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

T Rex 2X Long  vs.  Simplify Exchange Traded

T Rex 2X

Risk-Adjusted Performance

Very Weak

Over the last 90 days T Rex 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Simplify Exchange Traded

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Simplify Exchange is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T Rex and Simplify Exchange

The main advantage of trading using opposite T Rex and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, Simplify Exchange 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 Exchange will offset losses from the drop in Simplify Exchange's long position.

The idea behind T Rex 2X Long and Simplify Exchange Traded 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.