Correlation Between Invesco Solar and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Invesco Solar 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 Solar 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 Solar ETF and Amplify ETF Trust, you can compare the effects of market volatilities on Invesco Solar 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 Solar with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Solar and Amplify ETF.
Diversification Opportunities for Invesco Solar and Amplify ETF
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Amplify is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Solar ETF 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 Solar 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 Solar ETF 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 Solar i.e., Invesco Solar and Amplify ETF go up and down completely randomly.
Pair Corralation between Invesco Solar and Amplify ETF
Considering the 90-day investment horizon Invesco Solar ETF is expected to generate 0.75 times more return on investment than Amplify ETF. However, Invesco Solar ETF is 1.34 times less risky than Amplify ETF. It trades about 0.01 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.24 per unit of risk. If you would invest 3,435 in Invesco Solar ETF on November 18, 2024 and sell it today you would lose (4.00) from holding Invesco Solar ETF or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.97% |
| Values | Daily Returns |
Invesco Solar ETF vs. Amplify ETF Trust
Performance |
| Timeline |
| Invesco Solar ETF |
| Amplify ETF Trust |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Invesco Solar and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Solar and Amplify ETF
The main advantage of trading using opposite Invesco Solar and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Solar 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 Solar vs. iShares Global Clean | Invesco Solar vs. Invesco WilderHill Clean | Invesco Solar vs. First Trust NASDAQ | Invesco Solar vs. Global X Lithium |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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