Correlation Between First Trust and Amplify BlackSwan
Can any of the company-specific risk be diversified away by investing in both First Trust and Amplify BlackSwan 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 BlackSwan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Multi Asset and Amplify BlackSwan Growth, you can compare the effects of market volatilities on First Trust and Amplify BlackSwan 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 BlackSwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify BlackSwan.
Diversification Opportunities for First Trust and Amplify BlackSwan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Amplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Multi Asset and Amplify BlackSwan Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify BlackSwan Growth 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 Multi Asset are associated (or correlated) with Amplify BlackSwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify BlackSwan Growth has no effect on the direction of First Trust i.e., First Trust and Amplify BlackSwan go up and down completely randomly.
Pair Corralation between First Trust and Amplify BlackSwan
Given the investment horizon of 90 days First Trust is expected to generate 1.03 times less return on investment than Amplify BlackSwan. But when comparing it to its historical volatility, First Trust Multi Asset is 1.12 times less risky than Amplify BlackSwan. It trades about 0.07 of its potential returns per unit of risk. Amplify BlackSwan Growth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,434 in Amplify BlackSwan Growth on August 25, 2024 and sell it today you would earn a total of 592.00 from holding Amplify BlackSwan Growth or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Multi Asset vs. Amplify BlackSwan Growth
Performance |
| Timeline |
| First Trust Multi |
| Amplify BlackSwan Growth |
First Trust and Amplify BlackSwan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Amplify BlackSwan
The main advantage of trading using opposite First Trust and Amplify BlackSwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Amplify BlackSwan 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 BlackSwan will offset losses from the drop in Amplify BlackSwan's long position.| First Trust vs. Amplify BlackSwan Growth | First Trust vs. RPAR Risk Parity | First Trust vs. WisdomTree International Efficient | First Trust vs. iMGP DBi Managed |
| Amplify BlackSwan vs. WisdomTree 9060 Balanced | Amplify BlackSwan vs. RPAR Risk Parity | Amplify BlackSwan vs. Cambria Tail Risk | Amplify BlackSwan vs. Aptus Defined Risk |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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