Correlation Between Vanguard Health and Simplify Propel

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

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

Diversification Opportunities for Vanguard Health and Simplify Propel

0.79

Correlation Coefficient

Vanguard Health  Simplify Propel

Poor diversification

The 3 months correlation between Vanguard and Simplify is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Simplify Propel Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Propel Oppo and Vanguard Health 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 Health Care are associated (or correlated) with Simplify Propel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Propel Oppo has no effect on the direction of Vanguard Health i.e., Vanguard Health and Simplify Propel go up and down completely randomly.

Pair Corralation between Vanguard Health and Simplify Propel

Considering the 90-day investment horizon Vanguard Health Care is expected to generate 0.27 times more return on investment than Simplify Propel. However, Vanguard Health Care is 3.67 times less risky than Simplify Propel. It trades about -0.14 of its potential returns per unit of risk. Simplify Propel Opportunities is currently generating about -0.17 per unit of risk. If you would invest  27,827  in Vanguard Health Care on October 10, 2024 and sell it today you would lose (1,890) from holding Vanguard Health Care or give up 6.79% of portfolio value over 90 days.

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

Vanguard Health Care  vs.  Simplify Propel Opportunities

Vanguard Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Simplify Propel Oppo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simplify Propel Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Pair Trading with Vanguard Health and Simplify Propel

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

The idea behind Vanguard Health Care and Simplify Propel Opportunities 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.