# Correlation Between Simplify Macro and IQ Real

Can any of the company-specific risk be diversified away by investing in both Simplify Macro and IQ Real 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 Macro and IQ Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Macro Strategy and IQ Real Return, you can compare the effects of market volatilities on Simplify Macro and IQ Real 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 Macro with a short position of IQ Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Macro and IQ Real.

## Diversification Opportunities for Simplify Macro and IQ Real

0.66 | Correlation Coefficient |

### Poor diversification

The 3 months correlation between Simplify and CPI is

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

Considering the 90-day investment horizon Simplify Macro is expected to generate 18.68 times less return on investment than IQ Real. In addition to that, Simplify Macro is 1.09 times more volatile than IQ Real Return. It trades about 0.02 of its total potential returns per unit of risk. IQ Real Return is currently generating about 0.36 per unit of volatility. If you would invest

**2,493**in IQ Real Return on**September 2, 2023**and sell it today you would**earn a total of 70.00**from holding IQ Real Return or generate**2.81%**return on investment over**90**days.Time Period | 3 Months [change] |

Direction | Moves Together |

Strength | Significant |

Accuracy | 100.0% |

Values | Daily Returns |

## Simplify Macro Strategy vs. IQ Real Return

Performance |

Timeline |

Simplify Macro Strategy |

IQ Real Return |

## Simplify Macro and IQ Real Volatility Contrast

Predicted Return Density |

Returns |

## Pair Trading with Simplify Macro and IQ Real

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

Simplify Macro vs. Formidable ETF | ||

Simplify Macro vs. IQ Real Return | ||

Simplify Macro vs. ProShares Hedge Replication |

IQ Real vs. Merk Stagflation ETF | ||

IQ Real vs. SPDR Gold Shares | ||

IQ Real vs. Financial Select Sector | ||

IQ Real vs. IShares MSCI Brazil |

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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