Correlation Between Amplify High and Adaptive Alpha
Can any of the company-specific risk be diversified away by investing in both Amplify High and Adaptive Alpha 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 High and Adaptive Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify High Income and Adaptive Alpha Opportunities, you can compare the effects of market volatilities on Amplify High and Adaptive Alpha 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 High with a short position of Adaptive Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify High and Adaptive Alpha.
Diversification Opportunities for Amplify High and Adaptive Alpha
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amplify and Adaptive is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Amplify High Income and Adaptive Alpha Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Alpha Oppor and Amplify High 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 High Income are associated (or correlated) with Adaptive Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Alpha Oppor has no effect on the direction of Amplify High i.e., Amplify High and Adaptive Alpha go up and down completely randomly.
Pair Corralation between Amplify High and Adaptive Alpha
Considering the 90-day investment horizon Amplify High is expected to generate 1.4 times less return on investment than Adaptive Alpha. But when comparing it to its historical volatility, Amplify High Income is 2.23 times less risky than Adaptive Alpha. It trades about 0.13 of its potential returns per unit of risk. Adaptive Alpha Opportunities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,651 in Adaptive Alpha Opportunities on September 1, 2024 and sell it today you would earn a total of 304.00 from holding Adaptive Alpha Opportunities or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify High Income vs. Adaptive Alpha Opportunities
Performance |
| Timeline |
| Amplify High Income |
| Adaptive Alpha Oppor |
Amplify High and Adaptive Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify High and Adaptive Alpha
The main advantage of trading using opposite Amplify High and Adaptive Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify High position performs unexpectedly, Adaptive Alpha 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 Adaptive Alpha will offset losses from the drop in Adaptive Alpha's long position.| Amplify High vs. Invesco KBW High | Amplify High vs. Invesco CEF Income | Amplify High vs. Global X SuperDividend | Amplify High vs. Arrow ETF Trust |
| Adaptive Alpha vs. Cambria Global Asset | Adaptive Alpha vs. Cambria Global Value | Adaptive Alpha vs. Cambria Foreign Shareholder | Adaptive Alpha vs. Cambria Value and |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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