Correlation Between Simplify Volt and IShares Self

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

By analyzing existing cross correlation between Simplify Volt RoboCar and iShares Self Driving EV, you can compare the effects of market volatilities on Simplify Volt and IShares Self 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 Simplify Volt with a short position of IShares Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Volt and IShares Self.

Diversification Opportunities for Simplify Volt and IShares Self

-0.27

Correlation Coefficient

Simplify Volt  IShares Self

Very good diversification

The 3 months correlation between Simplify and IShares is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Volt RoboCar and iShares Self Driving EV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Self Driving and Simplify Volt 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 Simplify Volt RoboCar are associated (or correlated) with IShares Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Self Driving has no effect on the direction of Simplify Volt i.e., Simplify Volt and IShares Self go up and down completely randomly.

Pair Corralation between Simplify Volt and IShares Self

Given the investment horizon of 90 days Simplify Volt RoboCar is expected to generate 1.86 times more return on investment than IShares Self. However, Simplify Volt is 1.86 times more volatile than iShares Self Driving EV. It trades about 0.12 of its potential returns per unit of risk. iShares Self Driving EV is currently generating about -0.02 per unit of risk. If you would invest  864.00  in Simplify Volt RoboCar on October 6, 2024 and sell it today you would earn a total of  1,521  from holding Simplify Volt RoboCar or generate 176.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Simplify Volt RoboCar  vs.  iShares Self Driving EV

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.

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 fairly stable basic indicators, IShares Self is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Simplify Volt and IShares Self

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

The idea behind Simplify Volt RoboCar and iShares Self Driving EV 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.