Correlation Between First Trust and Amplify
Can any of the company-specific risk be diversified away by investing in both First Trust and Amplify 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Emerging and Amplify, you can compare the effects of market volatilities on First Trust and Amplify 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify.
Diversification Opportunities for First Trust and Amplify
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Amplify is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Emerging and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Emerging are associated (or correlated) with Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of First Trust i.e., First Trust and Amplify go up and down completely randomly.
Pair Corralation between First Trust and Amplify
Considering the 90-day investment horizon First Trust Emerging is expected to generate 0.2 times more return on investment than Amplify. However, First Trust Emerging is 5.12 times less risky than Amplify. It trades about 0.04 of its potential returns per unit of risk. Amplify is currently generating about -0.04 per unit of risk. If you would invest 1,935 in First Trust Emerging on September 2, 2024 and sell it today you would earn a total of 310.00 from holding First Trust Emerging or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.9% |
| Values | Daily Returns |
First Trust Emerging vs. Amplify
Performance |
| Timeline |
| First Trust Emerging |
| Amplify |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and Amplify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Amplify
The main advantage of trading using opposite First Trust and Amplify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Amplify 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 will offset losses from the drop in Amplify's long position.| First Trust vs. First Trust Developed | First Trust vs. First Trust Emerging | First Trust vs. First Trust Europe | First Trust vs. First Trust Large |
| Amplify vs. Amplify Thematic All Stars | Amplify vs. Amplify ETF Trust | Amplify vs. Amplify BlackSwan ISWN | Amplify vs. Amplify International Enhanced |
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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