Correlation Between Amplify Thematic and American Century
Can any of the company-specific risk be diversified away by investing in both Amplify Thematic and American Century 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 Thematic and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify Thematic All Stars and American Century ETF, you can compare the effects of market volatilities on Amplify Thematic and American Century 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 Thematic with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Thematic and American Century.
Diversification Opportunities for Amplify Thematic and American Century
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and American is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Thematic All Stars and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF and Amplify Thematic 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 Thematic All Stars are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Amplify Thematic i.e., Amplify Thematic and American Century go up and down completely randomly.
Pair Corralation between Amplify Thematic and American Century
Given the investment horizon of 90 days Amplify Thematic All Stars is expected to generate 1.7 times more return on investment than American Century. However, Amplify Thematic is 1.7 times more volatile than American Century ETF. It trades about 0.07 of its potential returns per unit of risk. American Century ETF is currently generating about 0.02 per unit of risk. If you would invest 2,085 in Amplify Thematic All Stars on November 28, 2024 and sell it today you would earn a total of 369.00 from holding Amplify Thematic All Stars or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify Thematic All Stars vs. American Century ETF
Performance |
| Timeline |
| Amplify Thematic All |
| American Century ETF |
Amplify Thematic and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify Thematic and American Century
The main advantage of trading using opposite Amplify Thematic and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Thematic position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Amplify Thematic vs. Amplify BlackSwan ISWN | Amplify Thematic vs. Global X Thematic | Amplify Thematic vs. Virtus ETF Trust |
| American Century vs. Dimensional ETF Trust | American Century vs. Vanguard Small Cap Index | American Century vs. First Trust Multi Manager | American Century vs. Vanguard SP Small Cap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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