Correlation Between IShares Trust and Amplify International

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

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

Diversification Opportunities for IShares Trust and Amplify International

0.91

Correlation Coefficient

IShares Trust  Amplify International

Almost no diversification

The 3 months correlation between IShares and Amplify is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Amplify International Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify International and IShares Trust 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 Trust are associated (or correlated) with Amplify International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify International has no effect on the direction of IShares Trust i.e., IShares Trust and Amplify International go up and down completely randomly.

Pair Corralation between IShares Trust and Amplify International

Given the investment horizon of 90 days IShares Trust is expected to generate 4.0 times less return on investment than Amplify International. But when comparing it to its historical volatility, iShares Trust is 5.04 times less risky than Amplify International. It trades about 0.23 of its potential returns per unit of risk. Amplify International Enhanced is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,951  in Amplify International Enhanced on December 20, 2024 and sell it today you would earn a total of  343.00  from holding Amplify International Enhanced or generate 11.62% return on investment over 90 days.

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

iShares Trust   vs.  Amplify International Enhanced

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amplify International

Risk-Adjusted Performance

Good

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

Pair Trading with IShares Trust and Amplify International

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

The idea behind iShares Trust and Amplify International Enhanced 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.