Correlation Between Visa and Amplify Thematic
Can any of the company-specific risk be diversified away by investing in both Visa and Amplify Thematic 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 Visa and Amplify Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Amplify Thematic All Stars, you can compare the effects of market volatilities on Visa and Amplify Thematic 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 Visa with a short position of Amplify Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Amplify Thematic.
Diversification Opportunities for Visa and Amplify Thematic
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Amplify is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Amplify Thematic All Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Thematic All and Visa 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 Visa Class A are associated (or correlated) with Amplify Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Thematic All has no effect on the direction of Visa i.e., Visa and Amplify Thematic go up and down completely randomly.
Pair Corralation between Visa and Amplify Thematic
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.93 times more return on investment than Amplify Thematic. However, Visa Class A is 1.08 times less risky than Amplify Thematic. It trades about 0.35 of its potential returns per unit of risk. Amplify Thematic All Stars is currently generating about 0.27 per unit of risk. If you would invest 28,119 in Visa Class A on August 26, 2024 and sell it today you would earn a total of 2,873 from holding Visa Class A or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Amplify Thematic All Stars
Performance |
| Timeline |
| Visa Class A |
| Amplify Thematic All |
Visa and Amplify Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Amplify Thematic
The main advantage of trading using opposite Visa and Amplify Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Amplify Thematic 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 Thematic will offset losses from the drop in Amplify Thematic's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Amplify Thematic vs. Amplify BlackSwan ISWN | Amplify Thematic vs. Global X Thematic | Amplify Thematic vs. Virtus ETF Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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