Correlation Between Amplify ETF and Sprott Junior

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

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

Diversification Opportunities for Amplify ETF and Sprott Junior

0.96

Correlation Coefficient

Amplify ETF  Sprott Junior

Almost no diversification

The 3 months correlation between Amplify and Sprott is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Sprott Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Gold and Amplify ETF 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 ETF Trust are associated (or correlated) with Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Gold has no effect on the direction of Amplify ETF i.e., Amplify ETF and Sprott Junior go up and down completely randomly.

Pair Corralation between Amplify ETF and Sprott Junior

Given the investment horizon of 90 days Amplify ETF is expected to generate 1.13 times less return on investment than Sprott Junior. In addition to that, Amplify ETF is 1.23 times more volatile than Sprott Junior Gold. It trades about 0.16 of its total potential returns per unit of risk. Sprott Junior Gold is currently generating about 0.22 per unit of volatility. If you would invest  3,295  in Sprott Junior Gold on December 29, 2024 and sell it today you would earn a total of  961.00  from holding Sprott Junior Gold or generate 29.17% return on investment over 90 days.

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

Amplify ETF Trust  vs.  Sprott Junior Gold

Amplify ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, Amplify ETF revealed solid returns over the last few months and may actually be approaching a breakup point.

Sprott Junior Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Junior Gold are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Sprott Junior revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify ETF and Sprott Junior

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

The idea behind Amplify ETF Trust and Sprott Junior Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.