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 500 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
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Amplify is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 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 500 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
Considering the 90-day investment horizon Invesco SP 500 is expected to generate 0.66 times more return on investment than Amplify ETF. However, Invesco SP 500 is 1.52 times less risky than Amplify ETF. It trades about 0.24 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.04 per unit of risk. If you would invest 3,100 in Invesco SP 500 on September 13, 2024 and sell it today you would earn a total of 90.00 from holding Invesco SP 500 or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. Amplify ETF Trust
Performance |
| Timeline |
| Invesco SP 500 |
| 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.The idea behind Invesco SP 500 and Amplify ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amplify ETF vs. Amplify International Enhanced | Amplify ETF vs. Amplify CWP Enhanced | Amplify ETF vs. Amplify High Income | Amplify ETF vs. Amplify BlackSwan ISWN |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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