Correlation Between Capri Holdings and Amplify ETF

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

Diversification Opportunities for Capri Holdings and Amplify ETF

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Capri and Amplify is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and Capri Holdings 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 Capri Holdings are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Capri Holdings i.e., Capri Holdings and Amplify ETF go up and down completely randomly.

Pair Corralation between Capri Holdings and Amplify ETF

Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Amplify ETF. In addition to that, Capri Holdings is 4.06 times more volatile than Amplify ETF Trust. It trades about -0.03 of its total potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.11 per unit of volatility. If you would invest  4,477  in Amplify ETF Trust on September 1, 2024 and sell it today you would earn a total of  799.00  from holding Amplify ETF Trust or generate 17.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.21%
ValuesDaily Returns

Capri Holdings  vs.  Amplify ETF Trust

 Performance 
       Timeline  
Capri Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Capri Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Amplify ETF Trust 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Amplify ETF reported solid returns over the last few months and may actually be approaching a breakup point.

Capri Holdings and Amplify ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Capri Holdings and Amplify ETF

The main advantage of trading using opposite Capri Holdings and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Amplify ETF 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 ETF will offset losses from the drop in Amplify ETF's long position.
The idea behind Capri Holdings and Amplify ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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