Correlation Between Amplify Transformational and VanEck Bitcoin

Can any of the company-specific risk be diversified away by investing in both Amplify Transformational and VanEck Bitcoin 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 VanEck Bitcoin 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 VanEck Bitcoin Trust, you can compare the effects of market volatilities on Amplify Transformational and VanEck Bitcoin 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 VanEck Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Transformational and VanEck Bitcoin.

Diversification Opportunities for Amplify Transformational and VanEck Bitcoin

0.91

Correlation Coefficient

Amplify Transformational  VanEck Bitcoin

Almost no diversification

The 3 months correlation between Amplify and VanEck is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and VanEck Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Bitcoin 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 VanEck Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Bitcoin Trust has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and VanEck Bitcoin go up and down completely randomly.

Pair Corralation between Amplify Transformational and VanEck Bitcoin

Given the investment horizon of 90 days Amplify Transformational Data is expected to under-perform the VanEck Bitcoin. In addition to that, Amplify Transformational is 1.04 times more volatile than VanEck Bitcoin Trust. It trades about -0.07 of its total potential returns per unit of risk. VanEck Bitcoin Trust is currently generating about -0.05 per unit of volatility. If you would invest  2,667  in VanEck Bitcoin Trust on December 29, 2024 and sell it today you would lose (298.00) from holding VanEck Bitcoin Trust or give up 11.17% of portfolio value over 90 days.

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

Amplify Transformational Data  vs.  VanEck Bitcoin Trust

Amplify Transformational

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify Transformational Data has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

VanEck Bitcoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Bitcoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Amplify Transformational and VanEck Bitcoin

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

The idea behind Amplify Transformational Data and VanEck Bitcoin 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.