Correlation Between Invesco SP and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Invesco SP 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 SP 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 SP MidCap and Amplify ETF Trust, you can compare the effects of market volatilities on Invesco SP 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 SP with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Amplify ETF.
Diversification Opportunities for Invesco SP and Amplify ETF
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and Amplify is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP MidCap 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 SP 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 SP MidCap 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 SP i.e., Invesco SP and Amplify ETF go up and down completely randomly.
Pair Corralation between Invesco SP and Amplify ETF
Given the investment horizon of 90 days Invesco SP MidCap is expected to generate 0.31 times more return on investment than Amplify ETF. However, Invesco SP MidCap is 3.26 times less risky than Amplify ETF. It trades about 0.05 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.03 per unit of risk. If you would invest 4,558 in Invesco SP MidCap on August 23, 2024 and sell it today you would earn a total of 1,313 from holding Invesco SP MidCap or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Invesco SP MidCap vs. Amplify ETF Trust
Performance |
| Timeline |
| Invesco SP MidCap |
| Amplify ETF Trust |
Invesco SP and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Amplify ETF
The main advantage of trading using opposite Invesco SP and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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 SP vs. First Trust Small | Invesco SP vs. First Trust Mid | Invesco SP vs. First Trust Small | Invesco SP vs. First Trust Large |
| Amplify ETF vs. iShares Exponential Technologies | Amplify ETF vs. Invesco Solar ETF | Amplify ETF vs. First Trust NASDAQ | Amplify ETF vs. Global X Autonomous |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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