Correlation Between Amplify Lithium and IShares Self

Can any of the company-specific risk be diversified away by investing in both Amplify Lithium and IShares Self 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 IShares Self 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 iShares Self Driving EV, you can compare the effects of market volatilities on Amplify Lithium and IShares Self 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 IShares Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Lithium and IShares Self.

Diversification Opportunities for Amplify Lithium and IShares Self

0.47

Correlation Coefficient

Amplify Lithium  IShares Self

Very weak diversification

The 3 months correlation between Amplify and IShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Lithium Battery and iShares Self Driving EV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Self Driving 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 IShares Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Self Driving has no effect on the direction of Amplify Lithium i.e., Amplify Lithium and IShares Self go up and down completely randomly.

Pair Corralation between Amplify Lithium and IShares Self

Given the investment horizon of 90 days Amplify Lithium is expected to generate 1.94 times less return on investment than IShares Self. In addition to that, Amplify Lithium is 1.03 times more volatile than iShares Self Driving EV. It trades about 0.02 of its total potential returns per unit of risk. iShares Self Driving EV is currently generating about 0.05 per unit of volatility. If you would invest  2,928  in iShares Self Driving EV on October 7, 2024 and sell it today you would earn a total of  72.00  from holding iShares Self Driving EV or generate 2.46% return on investment over 90 days.

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

Amplify Lithium Battery  vs.  iShares Self Driving EV

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 latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

iShares Self Driving

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Self Driving EV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares Self is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Amplify Lithium and IShares Self

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

The idea behind Amplify Lithium Battery and iShares Self Driving EV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.