Correlation Between First Trust and Amplify Thematic
Can any of the company-specific risk be diversified away by investing in both First Trust and Amplify Thematic 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 First Trust and Amplify Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Dow and Amplify Thematic All Stars, you can compare the effects of market volatilities on First Trust and Amplify Thematic 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 First Trust with a short position of Amplify Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify Thematic.
Diversification Opportunities for First Trust and Amplify Thematic
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Amplify is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Dow and Amplify Thematic All Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Thematic All and First Trust 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 First Trust Dow are associated (or correlated) with Amplify Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Thematic All has no effect on the direction of First Trust i.e., First Trust and Amplify Thematic go up and down completely randomly.
Pair Corralation between First Trust and Amplify Thematic
Considering the 90-day investment horizon First Trust Dow is expected to generate 0.85 times more return on investment than Amplify Thematic. However, First Trust Dow is 1.18 times less risky than Amplify Thematic. It trades about 0.39 of its potential returns per unit of risk. Amplify Thematic All Stars is currently generating about 0.27 per unit of risk. If you would invest 21,792 in First Trust Dow on August 26, 2024 and sell it today you would earn a total of 2,274 from holding First Trust Dow or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Dow vs. Amplify Thematic All Stars
Performance |
| Timeline |
| First Trust Dow |
| Amplify Thematic All |
First Trust and Amplify Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Amplify Thematic
The main advantage of trading using opposite First Trust and Amplify Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Amplify Thematic 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 Thematic will offset losses from the drop in Amplify Thematic's long position.| First Trust vs. First Trust Cloud | First Trust vs. iShares Expanded Tech Software | First Trust vs. First Trust NASDAQ 100 Technology | First Trust vs. iShares Aerospace Defense |
| Amplify Thematic vs. Amplify BlackSwan ISWN | Amplify Thematic vs. Global X Thematic | Amplify Thematic vs. Virtus 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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