Correlation Between Amplify ETF and Amplify Online

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

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

Diversification Opportunities for Amplify ETF and Amplify Online

0.91

Correlation Coefficient

Amplify ETF  Amplify Online

Almost no diversification

The 3 months correlation between Amplify and Amplify is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Amplify Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Online Retail and Amplify ETF 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 ETF Trust are associated (or correlated) with Amplify Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Online Retail has no effect on the direction of Amplify ETF i.e., Amplify ETF and Amplify Online go up and down completely randomly.

Pair Corralation between Amplify ETF and Amplify Online

Given the investment horizon of 90 days Amplify ETF is expected to generate 1.06 times less return on investment than Amplify Online. In addition to that, Amplify ETF is 1.07 times more volatile than Amplify Online Retail. It trades about 0.11 of its total potential returns per unit of risk. Amplify Online Retail is currently generating about 0.12 per unit of volatility. If you would invest  5,901  in Amplify Online Retail on September 20, 2024 and sell it today you would earn a total of  579.70  from holding Amplify Online Retail or generate 9.82% return on investment over 90 days.

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

Amplify ETF Trust  vs.  Amplify Online Retail

Amplify ETF Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Amplify ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amplify Online Retail

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Online Retail are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Amplify Online may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amplify ETF and Amplify Online

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

The idea behind Amplify ETF Trust and Amplify Online Retail 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.