Correlation Between Vanguard Intermediate and Simplify Exchange

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

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

Diversification Opportunities for Vanguard Intermediate and Simplify Exchange

0.99

Correlation Coefficient

Vanguard Intermediate  Simplify Exchange

No risk reduction

The 3 months correlation between Vanguard and Simplify is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Intermediate Term Tre 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 Vanguard Intermediate 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 Vanguard Intermediate Term Treasury 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 Vanguard Intermediate i.e., Vanguard Intermediate and Simplify Exchange go up and down completely randomly.

Pair Corralation between Vanguard Intermediate and Simplify Exchange

Given the investment horizon of 90 days Vanguard Intermediate Term Treasury is expected to generate 0.27 times more return on investment than Simplify Exchange. However, Vanguard Intermediate Term Treasury is 3.71 times less risky than Simplify Exchange. It trades about 0.03 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about -0.01 per unit of risk. If you would invest  5,504  in Vanguard Intermediate Term Treasury on September 20, 2024 and sell it today you would earn a total of  304.00  from holding Vanguard Intermediate Term Treasury or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Vanguard Intermediate Term Tre  vs.  Simplify Exchange Traded

Vanguard Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Intermediate Term Treasury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Vanguard Intermediate is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Simplify Exchange Traded

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simplify Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Vanguard Intermediate and Simplify Exchange

The main advantage of trading using opposite Vanguard Intermediate and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Intermediate 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 Vanguard Intermediate Term Treasury 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.