Correlation Between Amplify Thematic and Amplify

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

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

Diversification Opportunities for Amplify Thematic and Amplify

0.08

Correlation Coefficient

Amplify Thematic  Amplify

Significant diversification

The 3 months correlation between Amplify and Amplify is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Thematic All Stars and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify and Amplify Thematic 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 Thematic All Stars are associated (or correlated) with Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of Amplify Thematic i.e., Amplify Thematic and Amplify go up and down completely randomly.

Pair Corralation between Amplify Thematic and Amplify

If you would invest  2,532  in Amplify Thematic All Stars on October 26, 2024 and sell it today you would earn a total of  51.00  from holding Amplify Thematic All Stars or generate 2.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Amplify Thematic All Stars  vs.  Amplify

Amplify Thematic All

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Thematic All Stars are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Amplify Thematic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amplify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Amplify is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amplify Thematic and Amplify

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

The idea behind Amplify Thematic All Stars and Amplify 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.