Correlation Between Amplify ETF and AdvisorShares Pure
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and AdvisorShares Pure 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 Pure 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 Pure Cannabis, you can compare the effects of market volatilities on Amplify ETF and AdvisorShares Pure 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 Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and AdvisorShares Pure.
Diversification Opportunities for Amplify ETF and AdvisorShares Pure
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Amplify and AdvisorShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of Amplify ETF i.e., Amplify ETF and AdvisorShares Pure go up and down completely randomly.
Pair Corralation between Amplify ETF and AdvisorShares Pure
Allowing for the 90-day total investment horizon Amplify ETF Trust is expected to under-perform the AdvisorShares Pure. In addition to that, Amplify ETF is 1.04 times more volatile than AdvisorShares Pure Cannabis. It trades about -0.14 of its total potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about -0.11 per unit of volatility. If you would invest 320.00 in AdvisorShares Pure Cannabis on August 26, 2024 and sell it today you would lose (59.00) from holding AdvisorShares Pure Cannabis or give up 18.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. AdvisorShares Pure Cannabis
Performance |
| Timeline |
| Amplify ETF Trust |
| AdvisorShares Pure |
Amplify ETF and AdvisorShares Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and AdvisorShares Pure
The main advantage of trading using opposite Amplify ETF and AdvisorShares Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, AdvisorShares Pure 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 Pure will offset losses from the drop in AdvisorShares Pure's long position.| Amplify ETF vs. SPDR Kensho New | Amplify ETF vs. Global X FinTech | Amplify ETF vs. iShares Genomics Immunology | Amplify ETF vs. Aquagold International |
| AdvisorShares Pure vs. SPDR Kensho New | AdvisorShares Pure vs. Global X FinTech | AdvisorShares Pure vs. iShares Genomics Immunology | AdvisorShares Pure 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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