Correlation Between VCLO and Amplify Thematic

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

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

Diversification Opportunities for VCLO and Amplify Thematic

-0.8

Correlation Coefficient

VCLO  Amplify Thematic

Pay attention - limited upside

The 3 months correlation between VCLO and Amplify is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding VCLO and Amplify Thematic All Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Thematic All and VCLO 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 VCLO are associated (or correlated) with Amplify Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Thematic All has no effect on the direction of VCLO i.e., VCLO and Amplify Thematic go up and down completely randomly.

Pair Corralation between VCLO and Amplify Thematic

If you would invest  2,348  in Amplify Thematic All Stars on September 16, 2024 and sell it today you would earn a total of  197.00  from holding Amplify Thematic All Stars or generate 8.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

VCLO  vs.  Amplify Thematic All Stars

VCLO

Risk-Adjusted Performance

0 of 100

Very Weak

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

Amplify Thematic All

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Thematic All Stars are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Amplify Thematic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VCLO and Amplify Thematic

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

The idea behind VCLO and Amplify Thematic All Stars 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.