Correlation Between Amplify ETF and Exchange Traded

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

Diversification Opportunities for Amplify ETF and Exchange Traded

-0.86

Correlation Coefficient

Amplify ETF  Exchange Traded

Pay attention - limited upside

The 3 months correlation between Amplify and Exchange is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Amplify ETF i.e., Amplify ETF and Exchange Traded go up and down completely randomly.

Pair Corralation between Amplify ETF and Exchange Traded

Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 0.02 times more return on investment than Exchange Traded. However, Amplify ETF Trust is 56.58 times less risky than Exchange Traded. It trades about 0.47 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about -0.02 per unit of risk. If you would invest  9,458  in Amplify ETF Trust on October 21, 2024 and sell it today you would earn a total of  586.00  from holding Amplify ETF Trust or generate 6.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	49.15%
Values	Daily Returns

Amplify ETF Trust  vs.  Exchange Traded Concepts

Amplify ETF Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. 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.

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exchange Traded is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amplify ETF and Exchange Traded

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

The idea behind Amplify ETF Trust and Exchange Traded Concepts 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.