Correlation Between Amplify ETF and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Invesco SP 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 Invesco SP 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 Invesco SP 500, you can compare the effects of market volatilities on Amplify ETF and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Invesco SP.
Diversification Opportunities for Amplify ETF and Invesco SP
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amplify and Invesco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Amplify ETF i.e., Amplify ETF and Invesco SP go up and down completely randomly.
Pair Corralation between Amplify ETF and Invesco SP
Given the investment horizon of 90 days Amplify ETF is expected to generate 1.1 times less return on investment than Invesco SP. In addition to that, Amplify ETF is 1.14 times more volatile than Invesco SP 500. It trades about 0.25 of its total potential returns per unit of risk. Invesco SP 500 is currently generating about 0.31 per unit of volatility. If you would invest 5,734 in Invesco SP 500 on November 2, 2024 and sell it today you would earn a total of 276.00 from holding Invesco SP 500 or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. Invesco SP 500
Performance |
| Timeline |
| Amplify ETF Trust |
| Invesco SP 500 |
Amplify ETF and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and Invesco SP
The main advantage of trading using opposite Amplify ETF and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| Amplify ETF vs. Amplify International Enhanced | Amplify ETF vs. Amplify CWP Enhanced | Amplify ETF vs. Amplify High Income | Amplify ETF vs. Amplify BlackSwan ISWN |
| Invesco SP vs. Invesco SP 500 | Invesco SP vs. Invesco SP 500 | Invesco SP vs. Invesco SP MidCap | Invesco SP vs. Invesco SP SmallCap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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