Correlation Between TGIF and Amplify CWP

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

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

Diversification Opportunities for TGIF and Amplify CWP

-0.17

Correlation Coefficient

TGIF  Amplify CWP

Good diversification

The 3 months correlation between TGIF and Amplify is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding TGIF and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced and TGIF 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 TGIF are associated (or correlated) with Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of TGIF i.e., TGIF and Amplify CWP go up and down completely randomly.

Pair Corralation between TGIF and Amplify CWP

If you would invest  4,104  in Amplify CWP Enhanced on October 26, 2024 and sell it today you would earn a total of  105.00  from holding Amplify CWP Enhanced or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.53%
Values	Daily Returns

TGIF  vs.  Amplify CWP Enhanced

TGIF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TGIF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, TGIF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Amplify CWP Enhanced

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify CWP Enhanced are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amplify CWP is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TGIF and Amplify CWP

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

The idea behind TGIF and Amplify CWP Enhanced 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.