Correlation Between Amplify BlackSwan and Amplify ETF

Can any of the company-specific risk be diversified away by investing in both Amplify BlackSwan 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 BlackSwan 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 BlackSwan ISWN and Amplify ETF Trust, you can compare the effects of market volatilities on Amplify BlackSwan 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 BlackSwan with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and Amplify ETF.

Diversification Opportunities for Amplify BlackSwan and Amplify ETF

0.19

Correlation Coefficient

Amplify BlackSwan  Amplify ETF

Average diversification

The 3 months correlation between Amplify and Amplify is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan ISWN 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 BlackSwan 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 BlackSwan ISWN 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 BlackSwan i.e., Amplify BlackSwan and Amplify ETF go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and Amplify ETF

Given the investment horizon of 90 days Amplify BlackSwan is expected to generate 1.17 times less return on investment than Amplify ETF. But when comparing it to its historical volatility, Amplify BlackSwan ISWN is 1.56 times less risky than Amplify ETF. It trades about 0.24 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,675  in Amplify ETF Trust on December 20, 2024 and sell it today you would earn a total of  298.00  from holding Amplify ETF Trust or generate 11.14% return on investment over 90 days.

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

Amplify BlackSwan ISWN  vs.  Amplify ETF Trust

Amplify BlackSwan ISWN

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify BlackSwan ISWN are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Amplify BlackSwan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Amplify ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Amplify ETF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Amplify BlackSwan and Amplify ETF

The main advantage of trading using opposite Amplify BlackSwan and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify BlackSwan 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 BlackSwan ISWN 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.