Correlation Between ATT and Amplify ETF

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

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

Diversification Opportunities for ATT and Amplify ETF

0.72

Correlation Coefficient

ATT  Amplify ETF

Poor diversification

The 3 months correlation between ATT and Amplify is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and ATT 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 ATT Inc are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of ATT i.e., ATT and Amplify ETF go up and down completely randomly.

Pair Corralation between ATT and Amplify ETF

Taking into account the 90-day investment horizon ATT Inc is expected to under-perform the Amplify ETF. But the stock apears to be less risky and, when comparing its historical volatility, ATT Inc is 1.09 times less risky than Amplify ETF. The stock trades about 0.0 of its potential returns per unit of risk. The Amplify ETF Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6,119  in Amplify ETF Trust on October 26, 2024 and sell it today you would earn a total of  106.00  from holding Amplify ETF Trust or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

ATT Inc  vs.  Amplify ETF Trust

ATT Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Amplify ETF Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Amplify 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 ATT and Amplify ETF

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

The idea behind ATT Inc and Amplify 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.