Correlation Between Amplify High and Cabana Target
Can any of the company-specific risk be diversified away by investing in both Amplify High and Cabana Target 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 Cabana Target 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 Cabana Target Drawdown, you can compare the effects of market volatilities on Amplify High and Cabana Target 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 Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify High and Cabana Target.
Diversification Opportunities for Amplify High and Cabana Target
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amplify and Cabana is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amplify High Income and Cabana Target Drawdown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Drawdown 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 Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Drawdown has no effect on the direction of Amplify High i.e., Amplify High and Cabana Target go up and down completely randomly.
Pair Corralation between Amplify High and Cabana Target
Considering the 90-day investment horizon Amplify High Income is expected to generate 1.55 times more return on investment than Cabana Target. However, Amplify High is 1.55 times more volatile than Cabana Target Drawdown. It trades about 0.13 of its potential returns per unit of risk. Cabana Target Drawdown is currently generating about 0.14 per unit of risk. If you would invest 1,123 in Amplify High Income on September 1, 2024 and sell it today you would earn a total of 96.00 from holding Amplify High Income or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Amplify High Income vs. Cabana Target Drawdown
Performance |
| Timeline |
| Amplify High Income |
| Cabana Target Drawdown |
Amplify High and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify High and Cabana Target
The main advantage of trading using opposite Amplify High and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify High position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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