Correlation Between Amplify BlackSwan and Tidal ETF

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

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

Diversification Opportunities for Amplify BlackSwan and Tidal ETF

0.62

Correlation Coefficient

Amplify BlackSwan  Tidal ETF

Poor diversification

The 3 months correlation between Amplify and Tidal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and Amplify BlackSwan 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 BlackSwan Growth are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and Tidal ETF go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and Tidal ETF

Given the investment horizon of 90 days Amplify BlackSwan Growth is expected to under-perform the Tidal ETF. In addition to that, Amplify BlackSwan is 1.24 times more volatile than Tidal ETF Trust. It trades about -0.03 of its total potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.05 per unit of volatility. If you would invest  1,453  in Tidal ETF Trust on October 3, 2024 and sell it today you would earn a total of  23.00  from holding Tidal ETF Trust or generate 1.58% return on investment over 90 days.

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

Amplify BlackSwan Growth  vs.  Tidal ETF Trust

Amplify BlackSwan Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tidal ETF Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking indicators, Tidal ETF 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 BlackSwan and Tidal ETF

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

The idea behind Amplify BlackSwan Growth and Tidal 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.