Correlation Between IShares Trust and Amplify High

Can any of the company-specific risk be diversified away by investing in both IShares Trust and Amplify High 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 High 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 High Income, you can compare the effects of market volatilities on IShares Trust and Amplify High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Amplify High.

Diversification Opportunities for IShares Trust and Amplify High

0.59

Correlation Coefficient

IShares Trust  Amplify High

Very weak diversification

The 3 months correlation between IShares and Amplify is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High Income 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of IShares Trust i.e., IShares Trust and Amplify High go up and down completely randomly.

Pair Corralation between IShares Trust and Amplify High

Given the investment horizon of 90 days IShares Trust is expected to generate 3.26 times less return on investment than Amplify High. But when comparing it to its historical volatility, iShares Trust is 1.85 times less risky than Amplify High. It trades about 0.03 of its potential returns per unit of risk. Amplify High Income is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,179  in Amplify High Income on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Amplify High Income or generate 1.61% return on investment over 90 days.

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

iShares Trust   vs.  Amplify High Income

iShares Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 2 (%) 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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amplify High Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify High Income are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amplify High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Trust and Amplify High

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

The idea behind iShares Trust and Amplify High Income 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.