Correlation Between American Express and Amplify ETF

Can any of the company-specific risk be diversified away by investing in both American Express 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 American Express and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Express and Amplify ETF Trust, you can compare the effects of market volatilities on American Express 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 American Express with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Amplify ETF.

Diversification Opportunities for American Express and Amplify ETF

0.57

Correlation Coefficient

American Express  Amplify ETF

Very weak diversification

The 3 months correlation between American and Amplify is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Express 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 American Express 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 American Express 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 American Express i.e., American Express and Amplify ETF go up and down completely randomly.

Pair Corralation between American Express and Amplify ETF

Considering the 90-day investment horizon American Express is expected to generate 20.07 times more return on investment than Amplify ETF. However, American Express is 20.07 times more volatile than Amplify ETF Trust. It trades about 0.11 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.23 per unit of risk. If you would invest  27,315  in American Express on October 6, 2024 and sell it today you would earn a total of  2,993  from holding American Express or generate 10.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

American Express  vs.  Amplify ETF Trust

American Express

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Express are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, American Express may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Amplify ETF Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Amplify ETF is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with American Express and Amplify ETF

The main advantage of trading using opposite American Express and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.

The idea behind American Express and Amplify ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.