Correlation Between Amplify Transformational and Bitwise Funds

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

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

Diversification Opportunities for Amplify Transformational and Bitwise Funds

0.88

Correlation Coefficient

Amplify Transformational  Bitwise Funds

Very poor diversification

The 3 months correlation between Amplify and Bitwise is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and Amplify Transformational 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 Transformational Data are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and Bitwise Funds go up and down completely randomly.

Pair Corralation between Amplify Transformational and Bitwise Funds

Given the investment horizon of 90 days Amplify Transformational Data is expected to generate 0.72 times more return on investment than Bitwise Funds. However, Amplify Transformational Data is 1.39 times less risky than Bitwise Funds. It trades about -0.05 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about -0.35 per unit of risk. If you would invest  4,763  in Amplify Transformational Data on October 10, 2024 and sell it today you would lose (189.00) from holding Amplify Transformational Data or give up 3.97% of portfolio value over 90 days.

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

Amplify Transformational Data  vs.  Bitwise Funds Trust

Amplify Transformational

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Transformational Data are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Amplify Transformational disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bitwise Funds Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Funds Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Bitwise Funds demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify Transformational and Bitwise Funds

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

The idea behind Amplify Transformational Data and Bitwise Funds 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.

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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 Stocks Directory module to find actively traded stocks across global markets.