Correlation Between Amplify ETF and Amplify
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Amplify 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 Amplify 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 Amplify, you can compare the effects of market volatilities on Amplify ETF and Amplify 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 Amplify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Amplify.
Diversification Opportunities for Amplify ETF and Amplify
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amplify and Amplify is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of Amplify ETF i.e., Amplify ETF and Amplify go up and down completely randomly.
Pair Corralation between Amplify ETF and Amplify
Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 0.15 times more return on investment than Amplify. However, Amplify ETF Trust is 6.63 times less risky than Amplify. It trades about 0.08 of its potential returns per unit of risk. Amplify is currently generating about -0.05 per unit of risk. If you would invest 1,691 in Amplify ETF Trust on August 27, 2024 and sell it today you would earn a total of 494.00 from holding Amplify ETF Trust or generate 29.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.69% |
| Values | Daily Returns |
Amplify ETF Trust vs. Amplify
Performance |
| Timeline |
| Amplify ETF Trust |
| Amplify |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amplify ETF and Amplify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and Amplify
The main advantage of trading using opposite Amplify ETF and Amplify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Amplify 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 will offset losses from the drop in Amplify's long position.| Amplify ETF vs. Amplify BlackSwan ISWN | Amplify ETF vs. Amplify BlackSwan Growth | Amplify ETF vs. Amplify Thematic All Stars | Amplify ETF vs. Amplify ETF Trust |
| Amplify vs. Amplify Thematic All Stars | Amplify vs. Amplify ETF Trust | Amplify vs. Amplify BlackSwan ISWN | Amplify vs. Amplify International Enhanced |
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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