Correlation Between Amplify Transformational and IShares Bitcoin

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

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

Diversification Opportunities for Amplify Transformational and IShares Bitcoin

0.98

Correlation Coefficient

Amplify Transformational  IShares Bitcoin

Almost no diversification

The 3 months correlation between Amplify and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and iShares Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Bitcoin Trust and Amplify Transformational 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 Amplify Transformational Data are associated (or correlated) with IShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bitcoin Trust has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and IShares Bitcoin go up and down completely randomly.

Pair Corralation between Amplify Transformational and IShares Bitcoin

Given the investment horizon of 90 days Amplify Transformational is expected to generate 1.31 times less return on investment than IShares Bitcoin. But when comparing it to its historical volatility, Amplify Transformational Data is 1.37 times less risky than IShares Bitcoin. It trades about 0.27 of its potential returns per unit of risk. iShares Bitcoin Trust is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,298  in iShares Bitcoin Trust on September 2, 2024 and sell it today you would earn a total of  2,223  from holding iShares Bitcoin Trust or generate 67.4% return on investment over 90 days.

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

Amplify Transformational Data  vs.  iShares Bitcoin Trust

Amplify Transformational

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Transformational Data are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Amplify Transformational disclosed solid returns over the last few months and may actually be approaching a breakup point.

iShares Bitcoin Trust

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Bitcoin Trust are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward indicators, IShares Bitcoin unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify Transformational and IShares Bitcoin

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

The idea behind Amplify Transformational Data and iShares Bitcoin 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.