Correlation Between Simplify Equity and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both Simplify Equity and Swan Hedged 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 Simplify Equity and Swan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Equity PLUS and Swan Hedged Equity, you can compare the effects of market volatilities on Simplify Equity and Swan Hedged 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 Simplify Equity with a short position of Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Equity and Swan Hedged.
Diversification Opportunities for Simplify Equity and Swan Hedged
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simplify and Swan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Equity PLUS and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity and Simplify Equity 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 Simplify Equity PLUS are associated (or correlated) with Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of Simplify Equity i.e., Simplify Equity and Swan Hedged go up and down completely randomly.
Pair Corralation between Simplify Equity and Swan Hedged
Considering the 90-day investment horizon Simplify Equity PLUS is expected to generate 3.88 times more return on investment than Swan Hedged. However, Simplify Equity is 3.88 times more volatile than Swan Hedged Equity. It trades about 0.09 of its potential returns per unit of risk. Swan Hedged Equity is currently generating about 0.08 per unit of risk. If you would invest 3,188 in Simplify Equity PLUS on March 22, 2025 and sell it today you would earn a total of 451.00 from holding Simplify Equity PLUS or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Equity PLUS vs. Swan Hedged Equity
Performance |
| Timeline |
| Simplify Equity PLUS |
| Swan Hedged Equity |
Simplify Equity and Swan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Equity and Swan Hedged
The main advantage of trading using opposite Simplify Equity and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Equity position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged's long position.| Simplify Equity vs. Simplify Equity PLUS | Simplify Equity vs. Simplify Equity PLUS | Simplify Equity vs. Simplify Interest Rate |
| Swan Hedged vs. Amplify BlackSwan Growth | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. Simplify Exchange Traded | Swan Hedged vs. Simplify Equity PLUS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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