Correlation Between Cronos and Amplify ETF

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

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

Diversification Opportunities for Cronos and Amplify ETF

-0.71

Correlation Coefficient

Cronos  Amplify ETF

Pay attention - limited upside

The 3 months correlation between Cronos and Amplify is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group 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 Cronos 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 Cronos Group 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 Cronos i.e., Cronos and Amplify ETF go up and down completely randomly.

Pair Corralation between Cronos and Amplify ETF

Given the investment horizon of 90 days Cronos is expected to generate 2.08 times less return on investment than Amplify ETF. In addition to that, Cronos is 2.45 times more volatile than Amplify ETF Trust. It trades about 0.02 of its total potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.11 per unit of volatility. If you would invest  3,874  in Amplify ETF Trust on October 5, 2024 and sell it today you would earn a total of  2,053  from holding Amplify ETF Trust or generate 52.99% return on investment over 90 days.

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

Cronos Group  vs.  Amplify ETF Trust

Cronos Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cronos Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cronos is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Amplify ETF Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Amplify ETF showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cronos and Amplify ETF

The main advantage of trading using opposite Cronos and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos 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 Cronos Group 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.