Correlation Between Amplify ETF and Invesco Global

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

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

Diversification Opportunities for Amplify ETF and Invesco Global

0.9

Correlation Coefficient

Amplify ETF  Invesco Global

Almost no diversification

The 3 months correlation between Amplify and Invesco is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Invesco Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Listed and Amplify ETF 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 ETF Trust are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Listed has no effect on the direction of Amplify ETF i.e., Amplify ETF and Invesco Global go up and down completely randomly.

Pair Corralation between Amplify ETF and Invesco Global

Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 1.42 times more return on investment than Invesco Global. However, Amplify ETF is 1.42 times more volatile than Invesco Global Listed. It trades about 0.23 of its potential returns per unit of risk. Invesco Global Listed is currently generating about 0.19 per unit of risk. If you would invest  5,830  in Amplify ETF Trust on September 15, 2024 and sell it today you would earn a total of  266.00  from holding Amplify ETF Trust or generate 4.56% return on investment over 90 days.

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

Amplify ETF Trust  vs.  Invesco Global Listed

Amplify ETF Trust

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 16 (%) 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.

Invesco Global Listed

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Listed are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Invesco Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Amplify ETF and Invesco Global

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

The idea behind Amplify ETF Trust and Invesco Global Listed 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.