Correlation Between Advocate Capital and Simplify Interest

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

By analyzing existing cross correlation between Advocate Capital Management and Simplify Interest Rate, you can compare the effects of market volatilities on Advocate Capital and Simplify Interest 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 Advocate Capital with a short position of Simplify Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advocate Capital and Simplify Interest.

Diversification Opportunities for Advocate Capital and Simplify Interest

0.0

Correlation Coefficient

Advocate Capital  Simplify Interest

Pay attention - limited upside

The 3 months correlation between Advocate and Simplify is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advocate Capital Management and Simplify Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Interest Rate and Advocate Capital 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 Advocate Capital Management are associated (or correlated) with Simplify Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Interest Rate has no effect on the direction of Advocate Capital i.e., Advocate Capital and Simplify Interest go up and down completely randomly.

Pair Corralation between Advocate Capital and Simplify Interest

If you would invest (100.00) in Advocate Capital Management on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Advocate Capital Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advocate Capital Management  vs.  Simplify Interest Rate

Advocate Capital Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advocate Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advocate Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Simplify Interest Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simplify Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Simplify Interest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advocate Capital and Simplify Interest

The main advantage of trading using opposite Advocate Capital and Simplify Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advocate Capital position performs unexpectedly, Simplify Interest 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 Interest will offset losses from the drop in Simplify Interest's long position.

The idea behind Advocate Capital Management and Simplify Interest Rate 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.