Correlation Between Amplify BlackSwan and ETF Series

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Can any of the company-specific risk be diversified away by investing in both Amplify BlackSwan and ETF Series 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 BlackSwan and ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify BlackSwan Growth and ETF Series Solutions, you can compare the effects of market volatilities on Amplify BlackSwan and ETF Series 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 BlackSwan with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and ETF Series.

Diversification Opportunities for Amplify BlackSwan and ETF Series

AmplifyETFDiversified AwayAmplifyETFDiversified Away100%
0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Amplify and ETF is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and Amplify BlackSwan 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 BlackSwan Growth are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and ETF Series go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and ETF Series

Given the investment horizon of 90 days Amplify BlackSwan is expected to generate 1.24 times less return on investment than ETF Series. But when comparing it to its historical volatility, Amplify BlackSwan Growth is 1.06 times less risky than ETF Series. It trades about 0.08 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,896  in ETF Series Solutions on November 26, 2024 and sell it today you would earn a total of  557.00  from holding ETF Series Solutions or generate 19.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Amplify BlackSwan Growth  vs.  ETF Series Solutions

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -3-2-10123
JavaScript chart by amCharts 3.21.15SWAN MSTB
       Timeline  
Amplify BlackSwan Growth 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Amplify BlackSwan Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amplify BlackSwan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2929.53030.531
ETF Series Solutions 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ETF Series Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ETF Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3333.53434.535

Amplify BlackSwan and ETF Series Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.44-1.82-1.21-0.60.010.611.221.842.45 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15SWAN MSTB
       Returns  

Pair Trading with Amplify BlackSwan and ETF Series

The main advantage of trading using opposite Amplify BlackSwan and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify BlackSwan position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.
The idea behind Amplify BlackSwan Growth and ETF Series Solutions 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.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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