# Correlation Between Global X and Simplify Macro

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

## Diversification Opportunities for Global X and Simplify Macro

-0.15 | Correlation Coefficient |

### Good diversification

The 3 months correlation between Global and Simplify is

**-0.15**. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Simplify Macro Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Macro Strategy and Global X 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 Global X Funds are associated (or correlated) with Simplify Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Macro Strategy has no effect on the direction of Global X i.e., Global X and Simplify Macro go up and down completely randomly.## Pair Corralation between Global X and Simplify Macro

Given the investment horizon of 90 days Global X Funds is expected to generate 1.37 times more return on investment than Simplify Macro. However, Global X is 1.37 times more volatile than Simplify Macro Strategy. It trades about 0.24 of its potential returns per unit of risk. Simplify Macro Strategy is currently generating about -0.09 per unit of risk. If you would invest

**3,388**in Global X Funds on**May 13, 2024**and sell it today you would**earn a total of 168.00**from holding Global X Funds or generate**4.96%**return on investment over**90**days.Time Period | 3 Months [change] |

Direction | Moves Against |

Strength | Insignificant |

Accuracy | 100.0% |

Values | Daily Returns |

## Global X Funds vs. Simplify Macro Strategy

Performance |

Timeline |

Global X Funds |

Simplify Macro Strategy |

## Global X and Simplify Macro Volatility Contrast

Predicted Return Density |

Returns |

## Pair Trading with Global X and Simplify Macro

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

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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