Correlation Between Amplify ETF and ProShares Pet

Can any of the company-specific risk be diversified away by investing in both Amplify ETF and ProShares Pet 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 ProShares Pet 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 ProShares Pet Care, you can compare the effects of market volatilities on Amplify ETF and ProShares Pet 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 ProShares Pet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and ProShares Pet.

Diversification Opportunities for Amplify ETF and ProShares Pet

-0.55

Correlation Coefficient

Amplify ETF  ProShares Pet

Excellent diversification

The 3 months correlation between Amplify and ProShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and ProShares Pet Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Pet Care 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 ProShares Pet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Pet Care has no effect on the direction of Amplify ETF i.e., Amplify ETF and ProShares Pet go up and down completely randomly.

Pair Corralation between Amplify ETF and ProShares Pet

Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 1.73 times more return on investment than ProShares Pet. However, Amplify ETF is 1.73 times more volatile than ProShares Pet Care. It trades about 0.24 of its potential returns per unit of risk. ProShares Pet Care is currently generating about -0.01 per unit of risk. If you would invest  5,072  in Amplify ETF Trust on September 2, 2024 and sell it today you would earn a total of  1,090  from holding Amplify ETF Trust or generate 21.49% return on investment over 90 days.

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

Amplify ETF Trust  vs.  ProShares Pet Care

Amplify ETF Trust

Risk-Adjusted Performance

18 of 100

Solid

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

ProShares Pet Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Pet Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ProShares Pet is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amplify ETF and ProShares Pet

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

The idea behind Amplify ETF Trust and ProShares Pet Care 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.