Correlation Between Walmart and Amplify ETF

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

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

Diversification Opportunities for Walmart and Amplify ETF

0.56

Correlation Coefficient

Walmart  Amplify ETF

Very weak diversification

The 3 months correlation between Walmart and Amplify is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walmart 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 Walmart 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 Walmart 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 Walmart i.e., Walmart and Amplify ETF go up and down completely randomly.

Pair Corralation between Walmart and Amplify ETF

Considering the 90-day investment horizon Walmart is expected to generate 1.01 times more return on investment than Amplify ETF. However, Walmart is 1.01 times more volatile than Amplify ETF Trust. It trades about -0.11 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.22 per unit of risk. If you would invest  9,434  in Walmart on October 11, 2024 and sell it today you would lose (254.00) from holding Walmart or give up 2.69% of portfolio value over 90 days.

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

Walmart  vs.  Amplify ETF Trust

Walmart

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amplify ETF Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 1 (%) 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 Walmart and Amplify ETF

The main advantage of trading using opposite Walmart and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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 Walmart 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.