Correlation Between Invesco Aerospace and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Invesco Aerospace and Amplify ETF 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 Invesco Aerospace and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Aerospace Defense and Amplify ETF Trust, you can compare the effects of market volatilities on Invesco Aerospace and Amplify ETF 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 Invesco Aerospace with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Aerospace and Amplify ETF.
Diversification Opportunities for Invesco Aerospace and Amplify ETF
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Amplify is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Aerospace Defense and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and Invesco Aerospace 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 Invesco Aerospace Defense are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Invesco Aerospace i.e., Invesco Aerospace and Amplify ETF go up and down completely randomly.
Pair Corralation between Invesco Aerospace and Amplify ETF
Considering the 90-day investment horizon Invesco Aerospace Defense is expected to generate 0.18 times more return on investment than Amplify ETF. However, Invesco Aerospace Defense is 5.49 times less risky than Amplify ETF. It trades about 0.12 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.25 per unit of risk. If you would invest 11,664 in Invesco Aerospace Defense on August 26, 2024 and sell it today you would earn a total of 440.00 from holding Invesco Aerospace Defense or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Aerospace Defense vs. Amplify ETF Trust
Performance |
| Timeline |
| Invesco Aerospace Defense |
| Amplify ETF Trust |
Invesco Aerospace and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Aerospace and Amplify ETF
The main advantage of trading using opposite Invesco Aerospace and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Aerospace position performs unexpectedly, Amplify ETF 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 ETF will offset losses from the drop in Amplify ETF's long position.| Invesco Aerospace vs. Gabelli ETFs Trust | Invesco Aerospace vs. First Trust Exchange Traded | Invesco Aerospace vs. Northern Lights | Invesco Aerospace vs. First Trust Exchange Traded |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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