Correlation Between Amplify BlackSwan and RPAR Risk

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

Diversification Opportunities for Amplify BlackSwan and RPAR Risk

0.1

Correlation Coefficient

Amplify BlackSwan  RPAR Risk

Average diversification

The 3 months correlation between Amplify and RPAR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and RPAR Risk Parity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPAR Risk Parity 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 RPAR Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPAR Risk Parity has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and RPAR Risk go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and RPAR Risk

Given the investment horizon of 90 days Amplify BlackSwan Growth is expected to generate 0.92 times more return on investment than RPAR Risk. However, Amplify BlackSwan Growth is 1.08 times less risky than RPAR Risk. It trades about 0.08 of its potential returns per unit of risk. RPAR Risk Parity is currently generating about -0.03 per unit of risk. If you would invest  2,995  in Amplify BlackSwan Growth on September 12, 2024 and sell it today you would earn a total of  86.00  from holding Amplify BlackSwan Growth or generate 2.87% return on investment over 90 days.

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

Amplify BlackSwan Growth  vs.  RPAR Risk Parity

Amplify BlackSwan Growth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify BlackSwan Growth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amplify BlackSwan is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RPAR Risk Parity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RPAR Risk Parity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, RPAR Risk is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Amplify BlackSwan and RPAR Risk

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

The idea behind Amplify BlackSwan Growth and RPAR Risk Parity 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.