Correlation Between Verano Holdings and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Verano Holdings 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 Verano Holdings and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verano Holdings Corp and Amplify ETF Trust, you can compare the effects of market volatilities on Verano Holdings 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 Verano Holdings with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verano Holdings and Amplify ETF.
Diversification Opportunities for Verano Holdings and Amplify ETF
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Verano and Amplify is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Verano Holdings Corp 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 Verano Holdings 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 Verano Holdings Corp 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 Verano Holdings i.e., Verano Holdings and Amplify ETF go up and down completely randomly.
Pair Corralation between Verano Holdings and Amplify ETF
Assuming the 90 days horizon Verano Holdings Corp is expected to generate 1.34 times more return on investment than Amplify ETF. However, Verano Holdings is 1.34 times more volatile than Amplify ETF Trust. It trades about -0.01 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.02 per unit of risk. If you would invest 297.00 in Verano Holdings Corp on November 2, 2024 and sell it today you would lose (174.00) from holding Verano Holdings Corp or give up 58.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Verano Holdings Corp vs. Amplify ETF Trust
Performance |
| Timeline |
| Verano Holdings Corp |
| Amplify ETF Trust |
Verano Holdings and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verano Holdings and Amplify ETF
The main advantage of trading using opposite Verano Holdings and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verano Holdings 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.| Verano Holdings vs. Cresco Labs | Verano Holdings vs. AYR Strategies Class | Verano Holdings vs. Green Thumb Industries | Verano Holdings vs. Marimed |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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