Correlation Between Bondbloxx ETF and Simplify Exchange

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

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

Diversification Opportunities for Bondbloxx ETF and Simplify Exchange

0.92

Correlation Coefficient

Bondbloxx ETF  Simplify Exchange

Almost no diversification

The 3 months correlation between Bondbloxx and Simplify is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust 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 Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Bondbloxx ETF i.e., Bondbloxx ETF and Simplify Exchange go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Simplify Exchange

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to under-perform the Simplify Exchange. But the etf apears to be less risky and, when comparing its historical volatility, Bondbloxx ETF Trust is 1.08 times less risky than Simplify Exchange. The etf trades about -0.07 of its potential returns per unit of risk. The Simplify Exchange Traded is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,140  in Simplify Exchange Traded on October 6, 2024 and sell it today you would lose (22.00) from holding Simplify Exchange Traded or give up 1.03% of portfolio value over 90 days.

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

Bondbloxx ETF Trust  vs.  Simplify Exchange Traded

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the 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 somewhat strong basic indicators, Simplify Exchange is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Simplify Exchange

The main advantage of trading using opposite Bondbloxx ETF and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.