Correlation Between Amplify Lithium and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Amplify Lithium and SPDR SP 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 Amplify Lithium and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify Lithium Battery and SPDR SP Kensho, you can compare the effects of market volatilities on Amplify Lithium and SPDR SP 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 Amplify Lithium with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Lithium and SPDR SP.
Diversification Opportunities for Amplify Lithium and SPDR SP
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amplify and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Lithium Battery and SPDR SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Kensho and Amplify Lithium 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 Amplify Lithium Battery are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Kensho has no effect on the direction of Amplify Lithium i.e., Amplify Lithium and SPDR SP go up and down completely randomly.
Pair Corralation between Amplify Lithium and SPDR SP
Given the investment horizon of 90 days Amplify Lithium is expected to generate 4.74 times less return on investment than SPDR SP. But when comparing it to its historical volatility, Amplify Lithium Battery is 1.01 times less risky than SPDR SP. It trades about 0.02 of its potential returns per unit of risk. SPDR SP Kensho is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,776 in SPDR SP Kensho on August 31, 2024 and sell it today you would earn a total of 117.00 from holding SPDR SP Kensho or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify Lithium Battery vs. SPDR SP Kensho
Performance |
| Timeline |
| Amplify Lithium Battery |
| SPDR SP Kensho |
Amplify Lithium and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify Lithium and SPDR SP
The main advantage of trading using opposite Amplify Lithium and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Lithium position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Amplify Lithium vs. KraneShares Electric Vehicles | Amplify Lithium vs. iShares Self Driving EV | Amplify Lithium vs. SPDR SP Kensho | Amplify Lithium vs. Global X Lithium |
| SPDR SP vs. Freedom Day Dividend | SPDR SP vs. SmartETFs Dividend Builder | SPDR SP vs. Listed Funds Trust | SPDR SP vs. Martin Currie Sustainable |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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