Correlation Between Amplify Transformational and 26442RAB7

Can any of the company-specific risk be diversified away by investing in both Amplify Transformational and 26442RAB7 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 26442RAB7 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 DUKE ENERGY PROGRESS, you can compare the effects of market volatilities on Amplify Transformational and 26442RAB7 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 26442RAB7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Transformational and 26442RAB7.

Diversification Opportunities for Amplify Transformational and 26442RAB7

0.16

Correlation Coefficient

Amplify Transformational  26442RAB7

Average diversification

The 3 months correlation between Amplify and 26442RAB7 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and DUKE ENERGY PROGRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY PROGRESS 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 26442RAB7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY PROGRESS has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and 26442RAB7 go up and down completely randomly.

Pair Corralation between Amplify Transformational and 26442RAB7

Given the investment horizon of 90 days Amplify Transformational Data is expected to generate 0.17 times more return on investment than 26442RAB7. However, Amplify Transformational Data is 5.79 times less risky than 26442RAB7. It trades about -0.03 of its potential returns per unit of risk. DUKE ENERGY PROGRESS is currently generating about -0.18 per unit of risk. If you would invest  4,554  in Amplify Transformational Data on December 25, 2024 and sell it today you would lose (373.00) from holding Amplify Transformational Data or give up 8.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.93%
Values	Daily Returns

Amplify Transformational Data  vs.  DUKE ENERGY PROGRESS

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 quite persistent basic indicators, Amplify Transformational is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

DUKE ENERGY PROGRESS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DUKE ENERGY PROGRESS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for DUKE ENERGY PROGRESS investors.

Pair Trading with Amplify Transformational and 26442RAB7

The main advantage of trading using opposite Amplify Transformational and 26442RAB7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Transformational position performs unexpectedly, 26442RAB7 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 26442RAB7 will offset losses from the drop in 26442RAB7's long position.

The idea behind Amplify Transformational Data and DUKE ENERGY PROGRESS 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.