Correlation Between T Rex and Amplify Lithium
Can any of the company-specific risk be diversified away by investing in both T Rex and Amplify Lithium 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 T Rex and Amplify Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Long and Amplify Lithium Battery, you can compare the effects of market volatilities on T Rex and Amplify Lithium 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 T Rex with a short position of Amplify Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Amplify Lithium.
Diversification Opportunities for T Rex and Amplify Lithium
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NVDX and Amplify is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Amplify Lithium Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Lithium Battery and T Rex 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 T Rex 2X Long are associated (or correlated) with Amplify Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Lithium Battery has no effect on the direction of T Rex i.e., T Rex and Amplify Lithium go up and down completely randomly.
Pair Corralation between T Rex and Amplify Lithium
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 4.01 times more return on investment than Amplify Lithium. However, T Rex is 4.01 times more volatile than Amplify Lithium Battery. It trades about 0.14 of its potential returns per unit of risk. Amplify Lithium Battery is currently generating about -0.03 per unit of risk. If you would invest 249.00 in T Rex 2X Long on September 2, 2024 and sell it today you would earn a total of 1,493 from holding T Rex 2X Long or generate 599.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 56.85% |
| Values | Daily Returns |
T Rex 2X Long vs. Amplify Lithium Battery
Performance |
| Timeline |
| T Rex 2X |
| Amplify Lithium Battery |
T Rex and Amplify Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and Amplify Lithium
The main advantage of trading using opposite T Rex and Amplify Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, Amplify Lithium 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 Lithium will offset losses from the drop in Amplify Lithium's long position.| T Rex vs. Tidal Trust II | T Rex vs. Tidal Trust II | T Rex vs. Direxion Daily META | T Rex vs. Direxion Daily META |
| Amplify Lithium vs. Mast Global Battery | Amplify Lithium vs. Materials Select Sector | Amplify Lithium vs. Vanguard Materials Index | Amplify Lithium vs. SPDR SP Metals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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