Correlation Between Amplify Thematic and SCOR PK

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

Diversification Opportunities for Amplify Thematic and SCOR PK

0.76

Correlation Coefficient

Amplify Thematic  SCOR PK

Poor diversification

The 3 months correlation between Amplify and SCOR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Thematic All Stars and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Amplify Thematic i.e., Amplify Thematic and SCOR PK go up and down completely randomly.

Pair Corralation between Amplify Thematic and SCOR PK

Given the investment horizon of 90 days Amplify Thematic All Stars is expected to generate 0.57 times more return on investment than SCOR PK. However, Amplify Thematic All Stars is 1.76 times less risky than SCOR PK. It trades about 0.35 of its potential returns per unit of risk. SCOR PK is currently generating about 0.03 per unit of risk. If you would invest  2,348  in Amplify Thematic All Stars on September 16, 2024 and sell it today you would earn a total of  197.00  from holding Amplify Thematic All Stars or generate 8.39% return on investment over 90 days.

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

Amplify Thematic All Stars  vs.  SCOR PK

Amplify Thematic All

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Thematic All Stars are ranked lower than 18 (%) 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.

SCOR PK

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify Thematic and SCOR PK

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

The idea behind Amplify Thematic All Stars and SCOR PK 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.