Correlation Between IShares Consumer and Amplify Online

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

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

Diversification Opportunities for IShares Consumer and Amplify Online

0.89

Correlation Coefficient

IShares Consumer  Amplify Online

Very poor diversification

The 3 months correlation between IShares and Amplify is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Discretionary and Amplify Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Online Retail and IShares Consumer 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 Consumer Discretionary are associated (or correlated) with Amplify Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Online Retail has no effect on the direction of IShares Consumer i.e., IShares Consumer and Amplify Online go up and down completely randomly.

Pair Corralation between IShares Consumer and Amplify Online

Considering the 90-day investment horizon iShares Consumer Discretionary is expected to under-perform the Amplify Online. But the etf apears to be less risky and, when comparing its historical volatility, iShares Consumer Discretionary is 1.34 times less risky than Amplify Online. The etf trades about -0.12 of its potential returns per unit of risk. The Amplify Online Retail is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  6,516  in Amplify Online Retail on December 29, 2024 and sell it today you would lose (490.00) from holding Amplify Online Retail or give up 7.52% of portfolio value over 90 days.

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

iShares Consumer Discretionary  vs.  Amplify Online Retail

iShares Consumer Dis

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Consumer Discretionary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Amplify Online Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify Online Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with IShares Consumer and Amplify Online

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

The idea behind iShares Consumer Discretionary and Amplify Online Retail 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.