Correlation Between Bank of Montreal and Amplify ETF

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

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

Diversification Opportunities for Bank of Montreal and Amplify ETF

0.45

Correlation Coefficient

Bank of Montreal  Amplify ETF

Very weak diversification

The 3 months correlation between Bank and Amplify is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and Bank of Montreal 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 Bank of Montreal are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and Amplify ETF go up and down completely randomly.

Pair Corralation between Bank of Montreal and Amplify ETF

Given the investment horizon of 90 days Bank of Montreal is expected to under-perform the Amplify ETF. In addition to that, Bank of Montreal is 3.28 times more volatile than Amplify ETF Trust. It trades about -0.05 of its total potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.04 per unit of volatility. If you would invest  5,145  in Amplify ETF Trust on December 28, 2024 and sell it today you would lose (215.74) from holding Amplify ETF Trust or give up 4.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	44.26%
Values	Daily Returns

Bank of Montreal  vs.  Amplify ETF Trust

Bank of Montreal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of Montreal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Amplify ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Amplify ETF is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank of Montreal and Amplify ETF

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

The idea behind Bank of Montreal and Amplify ETF Trust 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.