Correlation Between Amplify ETF and First Trust
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and First Trust 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 Amplify ETF and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify ETF Trust and First Trust Global, you can compare the effects of market volatilities on Amplify ETF and First Trust 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 Amplify ETF with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and First Trust.
Diversification Opportunities for Amplify ETF and First Trust
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amplify and First is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and First Trust Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Global and Amplify ETF 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 Amplify ETF Trust are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Global has no effect on the direction of Amplify ETF i.e., Amplify ETF and First Trust go up and down completely randomly.
Pair Corralation between Amplify ETF and First Trust
Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 1.01 times more return on investment than First Trust. However, Amplify ETF is 1.01 times more volatile than First Trust Global. It trades about 0.36 of its potential returns per unit of risk. First Trust Global is currently generating about -0.19 per unit of risk. If you would invest 5,438 in Amplify ETF Trust on August 27, 2024 and sell it today you would earn a total of 733.00 from holding Amplify ETF Trust or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. First Trust Global
Performance |
| Timeline |
| Amplify ETF Trust |
| First Trust Global |
Amplify ETF and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and First Trust
The main advantage of trading using opposite Amplify ETF and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Amplify ETF vs. Global X FinTech | Amplify ETF vs. Amplify Online Retail | Amplify ETF vs. First Trust Cloud | Amplify ETF vs. Amplify ETF Trust |
| First Trust vs. Invesco Global Clean | First Trust vs. Invesco Solar ETF | First Trust vs. First Trust NASDAQ | First Trust vs. Invesco WilderHill Clean |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |