Correlation Between Sprott Physical and Amplify ETF

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Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Amplify ETF 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 Sprott Physical and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Gold and Amplify ETF Trust, you can compare the effects of market volatilities on Sprott Physical and Amplify ETF 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 Sprott Physical with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Amplify ETF.

Diversification Opportunities for Sprott Physical and Amplify ETF

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sprott and Amplify is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and Sprott Physical 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 Sprott Physical Gold are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Sprott Physical i.e., Sprott Physical and Amplify ETF go up and down completely randomly.

Pair Corralation between Sprott Physical and Amplify ETF

Considering the 90-day investment horizon Sprott Physical Gold is expected to generate 1.49 times more return on investment than Amplify ETF. However, Sprott Physical is 1.49 times more volatile than Amplify ETF Trust. It trades about 0.07 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.07 per unit of risk. If you would invest  1,779  in Sprott Physical Gold on October 26, 2024 and sell it today you would earn a total of  763.00  from holding Sprott Physical Gold or generate 42.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sprott Physical Gold  vs.  Amplify ETF Trust

 Performance 
       Timeline  
Sprott Physical Gold 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sprott Physical Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Sprott Physical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
Amplify ETF Trust 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amplify ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sprott Physical and Amplify ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sprott Physical and Amplify ETF

The main advantage of trading using opposite Sprott Physical and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Amplify ETF 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 Amplify ETF will offset losses from the drop in Amplify ETF's long position.
The idea behind Sprott Physical Gold and Amplify ETF 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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