Correlation Between Stellar and Amplify ETF

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

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

Diversification Opportunities for Stellar and Amplify ETF

0.62

Correlation Coefficient

Stellar  Amplify ETF

Poor diversification

The 3 months correlation between Stellar and Amplify is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Stellar 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 Stellar 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 Stellar 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 Stellar i.e., Stellar and Amplify ETF go up and down completely randomly.

Pair Corralation between Stellar and Amplify ETF

Assuming the 90 days trading horizon Stellar is expected to generate 6.73 times more return on investment than Amplify ETF. However, Stellar is 6.73 times more volatile than Amplify ETF Trust. It trades about 0.17 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.11 per unit of risk. If you would invest  10.00  in Stellar on October 26, 2024 and sell it today you would earn a total of  33.00  from holding Stellar or generate 330.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	46.88%
Values	Daily Returns

Stellar  vs.  Amplify ETF Trust

Stellar

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amplify ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Amplify ETF is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stellar and Amplify ETF

The main advantage of trading using opposite Stellar and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar 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 Stellar 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.