Correlation Between Alphabet and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Amplify ETF Trust, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Amplify ETF.
Diversification Opportunities for Alphabet and Amplify ETF
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphabet and Amplify is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Amplify ETF go up and down completely randomly.
Pair Corralation between Alphabet and Amplify ETF
Given the investment horizon of 90 days Alphabet is expected to generate 1.06 times less return on investment than Amplify ETF. In addition to that, Alphabet is 1.32 times more volatile than Amplify ETF Trust. It trades about 0.06 of its total potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.09 per unit of volatility. If you would invest 4,989 in Amplify ETF Trust on August 27, 2024 and sell it today you would earn a total of 1,113 from holding Amplify ETF Trust or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Amplify ETF Trust
Performance |
| Timeline |
| Alphabet Class C |
| Amplify ETF Trust |
Alphabet and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Amplify ETF
The main advantage of trading using opposite Alphabet and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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.| Amplify ETF vs. SPDR Kensho New | Amplify ETF vs. Global X FinTech | Amplify ETF vs. iShares Genomics Immunology | Amplify ETF vs. Aquagold International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |