Correlation Between Amplify Lithium and SPDR SP

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

By analyzing existing cross correlation between Amplify Lithium Battery and SPDR SP Kensho, you can compare the effects of market volatilities on Amplify Lithium and SPDR SP 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 Lithium with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Lithium and SPDR SP.

Diversification Opportunities for Amplify Lithium and SPDR SP

0.37

Correlation Coefficient

Amplify Lithium  SPDR SP

Weak diversification

The 3 months correlation between Amplify and SPDR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Lithium Battery and SPDR SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Kensho and Amplify Lithium 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 Lithium Battery are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Kensho has no effect on the direction of Amplify Lithium i.e., Amplify Lithium and SPDR SP go up and down completely randomly.

Pair Corralation between Amplify Lithium and SPDR SP

Given the investment horizon of 90 days Amplify Lithium Battery is expected to under-perform the SPDR SP. But the etf apears to be less risky and, when comparing its historical volatility, Amplify Lithium Battery is 1.1 times less risky than SPDR SP. The etf trades about -0.04 of its potential returns per unit of risk. The SPDR SP Kensho is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,500  in SPDR SP Kensho on October 25, 2024 and sell it today you would lose (616.00) from holding SPDR SP Kensho or give up 17.6% of portfolio value over 90 days.

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

Amplify Lithium Battery  vs.  SPDR SP Kensho

Amplify Lithium Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify Lithium Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amplify Lithium is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

SPDR SP Kensho

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Kensho are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, SPDR SP is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Amplify Lithium and SPDR SP

The main advantage of trading using opposite Amplify Lithium and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Lithium position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.

The idea behind Amplify Lithium Battery and SPDR SP Kensho 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.