Correlation Between Technology Select and Amplify Thematic
Can any of the company-specific risk be diversified away by investing in both Technology Select 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 Technology Select and Amplify Thematic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology Select Sector and Amplify Thematic All Stars, you can compare the effects of market volatilities on Technology Select 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 Technology Select with a short position of Amplify Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Select and Amplify Thematic.
Diversification Opportunities for Technology Select and Amplify Thematic
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Technology and Amplify is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Technology Select Sector 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 Technology Select 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 Technology Select Sector 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 Technology Select i.e., Technology Select and Amplify Thematic go up and down completely randomly.
Pair Corralation between Technology Select and Amplify Thematic
Considering the 90-day investment horizon Technology Select Sector is expected to generate 0.86 times more return on investment than Amplify Thematic. However, Technology Select Sector is 1.16 times less risky than Amplify Thematic. It trades about 0.1 of its potential returns per unit of risk. Amplify Thematic All Stars is currently generating about 0.06 per unit of risk. If you would invest 13,090 in Technology Select Sector on August 26, 2024 and sell it today you would earn a total of 10,270 from holding Technology Select Sector or generate 78.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technology Select Sector vs. Amplify Thematic All Stars
Performance |
| Timeline |
| Technology Select Sector |
| Amplify Thematic All |
Technology Select and Amplify Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology Select and Amplify Thematic
The main advantage of trading using opposite Technology Select and Amplify Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Select 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.| Technology Select vs. First Trust Exchange Traded | Technology Select vs. Ultimus Managers Trust | Technology Select vs. Horizon Kinetics Medical | Technology Select vs. Harbor Health Care |
| Amplify Thematic vs. Invesco DWA Utilities | Amplify Thematic vs. Invesco Dynamic Large | Amplify Thematic vs. Invesco Dynamic Large | Amplify Thematic vs. HUMANA INC |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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