Correlation Between Amplify Online and Amplify ETF

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

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

Diversification Opportunities for Amplify Online and Amplify ETF

0.93

Correlation Coefficient

Amplify Online  Amplify ETF

Almost no diversification

The 3 months correlation between Amplify and Amplify is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Online Retail 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 Amplify Online 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 Online Retail 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 Amplify Online i.e., Amplify Online and Amplify ETF go up and down completely randomly.

Pair Corralation between Amplify Online and Amplify ETF

Given the investment horizon of 90 days Amplify Online Retail is expected to generate 0.87 times more return on investment than Amplify ETF. However, Amplify Online Retail is 1.15 times less risky than Amplify ETF. It trades about 0.32 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.25 per unit of risk. If you would invest  5,476  in Amplify Online Retail on September 5, 2024 and sell it today you would earn a total of  1,386  from holding Amplify Online Retail or generate 25.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Amplify Online Retail  vs.  Amplify ETF Trust

Amplify Online Retail

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Online Retail are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Amplify Online showed solid returns over the last few months and may actually be approaching a breakup point.

Amplify ETF Trust

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 20 (%) 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 Amplify Online and Amplify ETF

The main advantage of trading using opposite Amplify Online and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Online 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 Amplify Online Retail 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..