Correlation Between Amplify Transformational and MARATHON

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

Diversification Opportunities for Amplify Transformational and MARATHON

0.07

Correlation Coefficient

Amplify Transformational  MARATHON

Significant diversification

The 3 months correlation between Amplify and MARATHON is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and MARATHON PETE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARATHON PETE P 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 MARATHON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARATHON PETE P has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and MARATHON go up and down completely randomly.

Pair Corralation between Amplify Transformational and MARATHON

Given the investment horizon of 90 days Amplify Transformational Data is expected to under-perform the MARATHON. In addition to that, Amplify Transformational is 3.08 times more volatile than MARATHON PETE P. It trades about -0.03 of its total potential returns per unit of risk. MARATHON PETE P is currently generating about 0.02 per unit of volatility. If you would invest  8,483  in MARATHON PETE P on December 25, 2024 and sell it today you would earn a total of  84.00  from holding MARATHON PETE P or generate 0.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

Amplify Transformational Data  vs.  MARATHON PETE P

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.

MARATHON PETE P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MARATHON PETE P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MARATHON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amplify Transformational and MARATHON

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

The idea behind Amplify Transformational Data and MARATHON PETE P 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 Anywhere module to track or share privately all of your investments from the convenience of any device.