Correlation Between Capitol Series and Simplify Asset

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

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

Diversification Opportunities for Capitol Series and Simplify Asset

0.61

Correlation Coefficient

Capitol Series  Simplify Asset

Poor diversification

The 3 months correlation between Capitol and Simplify is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Series Trust and Simplify Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Asset Management and Capitol Series 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 Capitol Series Trust are associated (or correlated) with Simplify Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Asset Management has no effect on the direction of Capitol Series i.e., Capitol Series and Simplify Asset go up and down completely randomly.

Pair Corralation between Capitol Series and Simplify Asset

If you would invest  2,741  in Capitol Series Trust on September 21, 2024 and sell it today you would earn a total of  7,439  from holding Capitol Series Trust or generate 271.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Capitol Series Trust  vs.  Simplify Asset Management

Capitol Series Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capitol Series Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Capitol Series exhibited solid returns over the last few months and may actually be approaching a breakup point.

Simplify Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Simplify Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Simplify Asset is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Capitol Series and Simplify Asset

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

The idea behind Capitol Series Trust and Simplify Asset Management 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.