Correlation Between Amplify ETF and AdvisorShares Psychedelics
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and AdvisorShares Psychedelics 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 AdvisorShares Psychedelics 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 AdvisorShares Psychedelics ETF, you can compare the effects of market volatilities on Amplify ETF and AdvisorShares Psychedelics 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 AdvisorShares Psychedelics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and AdvisorShares Psychedelics.
Diversification Opportunities for Amplify ETF and AdvisorShares Psychedelics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amplify and AdvisorShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and AdvisorShares Psychedelics ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Psychedelics 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 AdvisorShares Psychedelics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Psychedelics has no effect on the direction of Amplify ETF i.e., Amplify ETF and AdvisorShares Psychedelics go up and down completely randomly.
Pair Corralation between Amplify ETF and AdvisorShares Psychedelics
Allowing for the 90-day total investment horizon Amplify ETF Trust is expected to under-perform the AdvisorShares Psychedelics. But the etf apears to be less risky and, when comparing its historical volatility, Amplify ETF Trust is 1.52 times less risky than AdvisorShares Psychedelics. The etf trades about -0.02 of its potential returns per unit of risk. The AdvisorShares Psychedelics ETF is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,117 in AdvisorShares Psychedelics ETF on August 30, 2024 and sell it today you would lose (913.00) from holding AdvisorShares Psychedelics ETF or give up 43.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. AdvisorShares Psychedelics ETF
Performance |
| Timeline |
| Amplify ETF Trust |
| AdvisorShares Psychedelics |
Amplify ETF and AdvisorShares Psychedelics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and AdvisorShares Psychedelics
The main advantage of trading using opposite Amplify ETF and AdvisorShares Psychedelics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, AdvisorShares Psychedelics 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 AdvisorShares Psychedelics will offset losses from the drop in AdvisorShares Psychedelics' long position.| Amplify ETF vs. Cronos Group | Amplify ETF vs. AdvisorShares Pure Cannabis | Amplify ETF vs. Canopy Growth Corp | Amplify ETF vs. Curaleaf Holdings |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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