Correlation Between Amplify BlackSwan and Alpha Architect

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

Diversification Opportunities for Amplify BlackSwan and Alpha Architect

0.0

Correlation Coefficient

Amplify BlackSwan  Alpha Architect

Pay attention - limited upside

The 3 months correlation between Amplify and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Alpha Architect Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Architect Value 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 Alpha Architect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Architect Value has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and Alpha Architect go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and Alpha Architect

If you would invest (100.00) in Alpha Architect Value on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Alpha Architect Value or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Amplify BlackSwan Growth  vs.  Alpha Architect Value

Amplify BlackSwan Growth

Risk-Adjusted Performance

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.

Alpha Architect Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Architect Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alpha Architect is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amplify BlackSwan and Alpha Architect

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

The idea behind Amplify BlackSwan Growth and Alpha Architect Value 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..