Correlation Between First Trust and Amplify Online
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Amplify Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Consumer and Amplify Online Retail, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Amplify Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify Online.
Diversification Opportunities for First Trust and Amplify Online
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Amplify is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Consumer 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 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 Consumer 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 First Trust i.e., First Trust and Amplify Online go up and down completely randomly.
Pair Corralation between First Trust and Amplify Online
Considering the 90-day investment horizon First Trust Consumer is expected to generate 0.76 times more return on investment than Amplify Online. However, First Trust Consumer is 1.31 times less risky than Amplify Online. It trades about 0.0 of its potential returns per unit of risk. Amplify Online Retail is currently generating about -0.01 per unit of risk. If you would invest 6,832 in First Trust Consumer on November 4, 2024 and sell it today you would lose (20.00) from holding First Trust Consumer or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Consumer vs. Amplify Online Retail
Performance |
| Timeline |
| First Trust Consumer |
| Amplify Online Retail |
First Trust and Amplify Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Amplify Online
The main advantage of trading using opposite First Trust and Amplify Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. First Trust Consumer | First Trust vs. First Trust IndustrialsProducer | First Trust vs. First Trust Health | First Trust vs. First Trust Materials |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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