Correlation Between Adaptive Alpha and Amplify High
Can any of the company-specific risk be diversified away by investing in both Adaptive Alpha and Amplify High 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 Adaptive Alpha and Amplify High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaptive Alpha Opportunities and Amplify High Income, you can compare the effects of market volatilities on Adaptive Alpha and Amplify High 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 Adaptive Alpha with a short position of Amplify High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptive Alpha and Amplify High.
Diversification Opportunities for Adaptive Alpha and Amplify High
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adaptive and Amplify is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Adaptive Alpha Opportunities and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High Income and Adaptive Alpha 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 Adaptive Alpha Opportunities are associated (or correlated) with Amplify High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of Adaptive Alpha i.e., Adaptive Alpha and Amplify High go up and down completely randomly.
Pair Corralation between Adaptive Alpha and Amplify High
Given the investment horizon of 90 days Adaptive Alpha Opportunities is expected to generate 1.74 times more return on investment than Amplify High. However, Adaptive Alpha is 1.74 times more volatile than Amplify High Income. It trades about 0.07 of its potential returns per unit of risk. Amplify High Income is currently generating about 0.08 per unit of risk. If you would invest 2,084 in Adaptive Alpha Opportunities on November 9, 2024 and sell it today you would earn a total of 754.00 from holding Adaptive Alpha Opportunities or generate 36.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaptive Alpha Opportunities vs. Amplify High Income
Performance |
| Timeline |
| Adaptive Alpha Oppor |
| Amplify High Income |
Adaptive Alpha and Amplify High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaptive Alpha and Amplify High
The main advantage of trading using opposite Adaptive Alpha and Amplify High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptive Alpha position performs unexpectedly, Amplify High 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 Amplify High will offset losses from the drop in Amplify High's long position.| Adaptive Alpha vs. First Trust Active | Adaptive Alpha vs. Absolute Core Strategy | Adaptive Alpha vs. Pacer Lunt Large | Adaptive Alpha vs. SmartETFs Asia Pacific |
| Amplify High vs. Invesco KBW High | Amplify High vs. Invesco CEF Income | Amplify High vs. Global X SuperDividend | Amplify High vs. Arrow ETF Trust |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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