Correlation Between Amplify Lithium and Direxion
Can any of the company-specific risk be diversified away by investing in both Amplify Lithium and Direxion 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 Direxion 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 Direxion, you can compare the effects of market volatilities on Amplify Lithium and Direxion 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 Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Lithium and Direxion.
Diversification Opportunities for Amplify Lithium and Direxion
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amplify and Direxion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Lithium Battery and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion 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 Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Amplify Lithium i.e., Amplify Lithium and Direxion go up and down completely randomly.
Pair Corralation between Amplify Lithium and Direxion
If you would invest 930.00 in Amplify Lithium Battery on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Amplify Lithium Battery or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Amplify Lithium Battery vs. Direxion
Performance |
| Timeline |
| Amplify Lithium Battery |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amplify Lithium and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify Lithium and Direxion
The main advantage of trading using opposite Amplify Lithium and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Lithium position performs unexpectedly, Direxion 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 Direxion will offset losses from the drop in Direxion'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 |
| Direxion vs. SPDR Kensho New | Direxion vs. The 3D Printing | Direxion vs. Invesco NASDAQ Next | Direxion vs. ARK Space Exploration |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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