Correlation Between DSJA and Amplify ETF

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

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

Diversification Opportunities for DSJA and Amplify ETF

0.63

Correlation Coefficient

DSJA  Amplify ETF

Poor diversification

The 3 months correlation between DSJA and Amplify is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DSJA 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 DSJA 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 DSJA 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 DSJA i.e., DSJA and Amplify ETF go up and down completely randomly.

Pair Corralation between DSJA and Amplify ETF

Given the investment horizon of 90 days DSJA is expected to generate 4.21 times more return on investment than Amplify ETF. However, DSJA is 4.21 times more volatile than Amplify ETF Trust. It trades about 0.31 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.47 per unit of risk. If you would invest  2,838  in DSJA on October 22, 2024 and sell it today you would earn a total of  27.00  from holding DSJA or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.76%
Values	Daily Returns

DSJA  vs.  Amplify ETF Trust

DSJA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amplify ETF Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Amplify ETF is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with DSJA and Amplify ETF

The main advantage of trading using opposite DSJA and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA 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 DSJA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.