Correlation Between FlexShares Real and Simplify Bitcoin

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

By analyzing existing cross correlation between FlexShares Real Assets and Simplify Bitcoin Strategy, you can compare the effects of market volatilities on FlexShares Real and Simplify Bitcoin 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 FlexShares Real with a short position of Simplify Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares Real and Simplify Bitcoin.

Diversification Opportunities for FlexShares Real and Simplify Bitcoin

-0.46

Correlation Coefficient

FlexShares Real  Simplify Bitcoin

Very good diversification

The 3 months correlation between FlexShares and Simplify is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Real Assets and Simplify Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Bitcoin Strategy and FlexShares Real 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 FlexShares Real Assets are associated (or correlated) with Simplify Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Bitcoin Strategy has no effect on the direction of FlexShares Real i.e., FlexShares Real and Simplify Bitcoin go up and down completely randomly.

Pair Corralation between FlexShares Real and Simplify Bitcoin

Given the investment horizon of 90 days FlexShares Real Assets is expected to under-perform the Simplify Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, FlexShares Real Assets is 6.81 times less risky than Simplify Bitcoin. The etf trades about -0.05 of its potential returns per unit of risk. The Simplify Bitcoin Strategy is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,863  in Simplify Bitcoin Strategy on September 13, 2024 and sell it today you would earn a total of  1,290  from holding Simplify Bitcoin Strategy or generate 69.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

FlexShares Real Assets  vs.  Simplify Bitcoin Strategy

FlexShares Real Assets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Simplify Bitcoin Strategy

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Bitcoin Strategy are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Simplify Bitcoin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FlexShares Real and Simplify Bitcoin

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

The idea behind FlexShares Real Assets and Simplify Bitcoin Strategy 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.