Correlation Between Invesco China and Amplify Online
Can any of the company-specific risk be diversified away by investing in both Invesco China and Amplify Online 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 Invesco China and Amplify Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco China Technology and Amplify Online Retail, you can compare the effects of market volatilities on Invesco China and Amplify Online 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 Invesco China with a short position of Amplify Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco China and Amplify Online.
Diversification Opportunities for Invesco China and Amplify Online
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Amplify is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Invesco China Technology and Amplify Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Online Retail and Invesco China 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 Invesco China Technology are associated (or correlated) with Amplify Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Online Retail has no effect on the direction of Invesco China i.e., Invesco China and Amplify Online go up and down completely randomly.
Pair Corralation between Invesco China and Amplify Online
Given the investment horizon of 90 days Invesco China Technology is expected to under-perform the Amplify Online. In addition to that, Invesco China is 2.05 times more volatile than Amplify Online Retail. It trades about -0.04 of its total potential returns per unit of risk. Amplify Online Retail is currently generating about 0.34 per unit of volatility. If you would invest 6,159 in Amplify Online Retail on August 29, 2024 and sell it today you would earn a total of 642.00 from holding Amplify Online Retail or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco China Technology vs. Amplify Online Retail
Performance |
| Timeline |
| Invesco China Technology |
| Amplify Online Retail |
Invesco China and Amplify Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco China and Amplify Online
The main advantage of trading using opposite Invesco China and Amplify Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco China position performs unexpectedly, Amplify Online 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 Online will offset losses from the drop in Amplify Online's long position.| Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
| Amplify Online vs. ProShares Online Retail | Amplify Online vs. WisdomTree Cloud Computing | Amplify Online vs. Amplify ETF Trust | Amplify Online vs. Global X Cloud |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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