Correlation Between Amplify and Amplify High

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

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

Diversification Opportunities for Amplify and Amplify High

0.23

Correlation Coefficient

Amplify  Amplify High

Modest diversification

The 3 months correlation between Amplify and Amplify is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Amplify and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High Income and Amplify 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 are associated (or correlated) with Amplify High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of Amplify i.e., Amplify and Amplify High go up and down completely randomly.

Pair Corralation between Amplify and Amplify High

Given the investment horizon of 90 days Amplify is expected to under-perform the Amplify High. In addition to that, Amplify is 8.89 times more volatile than Amplify High Income. It trades about -0.05 of its total potential returns per unit of risk. Amplify High Income is currently generating about 0.06 per unit of volatility. If you would invest  1,020  in Amplify High Income on October 24, 2024 and sell it today you would earn a total of  176.00  from holding Amplify High Income or generate 17.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.17%
Values	Daily Returns

Amplify  vs.  Amplify High Income

Amplify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Amplify is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Amplify High Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify High Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amplify High 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 and Amplify High

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

The idea behind Amplify and Amplify High Income 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.