Correlation Between First Trust and Amplify Transformational
Can any of the company-specific risk be diversified away by investing in both First Trust and Amplify Transformational 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 Transformational into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Indxx and Amplify Transformational Data, you can compare the effects of market volatilities on First Trust and Amplify Transformational 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 Transformational. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify Transformational.
Diversification Opportunities for First Trust and Amplify Transformational
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Amplify is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Indxx and Amplify Transformational Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Transformational 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 Indxx are associated (or correlated) with Amplify Transformational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Transformational has no effect on the direction of First Trust i.e., First Trust and Amplify Transformational go up and down completely randomly.
Pair Corralation between First Trust and Amplify Transformational
Given the investment horizon of 90 days First Trust is expected to generate 1.98 times less return on investment than Amplify Transformational. But when comparing it to its historical volatility, First Trust Indxx is 4.09 times less risky than Amplify Transformational. It trades about 0.33 of its potential returns per unit of risk. Amplify Transformational Data is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,436 in Amplify Transformational Data on November 3, 2024 and sell it today you would earn a total of 422.00 from holding Amplify Transformational Data or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Trust Indxx vs. Amplify Transformational Data
Performance |
| Timeline |
| First Trust Indxx |
| Amplify Transformational |
First Trust and Amplify Transformational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Amplify Transformational
The main advantage of trading using opposite First Trust and Amplify Transformational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Amplify Transformational 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 Transformational will offset losses from the drop in Amplify Transformational's long position.| First Trust vs. Siren Nasdaq NexGen | First Trust vs. Amplify Transformational Data | First Trust vs. Global X Blockchain | First Trust vs. VanEck Digital Transformation |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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