Correlation Between IShares MSCI and Amplify

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

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

Diversification Opportunities for IShares MSCI and Amplify

-0.4

Correlation Coefficient

IShares MSCI  Amplify

Very good diversification

The 3 months correlation between IShares and Amplify is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify and IShares MSCI 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 iShares MSCI Emerging are associated (or correlated) with Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of IShares MSCI i.e., IShares MSCI and Amplify go up and down completely randomly.

Pair Corralation between IShares MSCI and Amplify

If you would invest (100.00) in Amplify on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Amplify or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

iShares MSCI Emerging  vs.  Amplify

iShares MSCI Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with IShares MSCI and Amplify

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

The idea behind iShares MSCI Emerging and Amplify 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.