Correlation Between Amplify Thematic and SSGA Active

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

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

Diversification Opportunities for Amplify Thematic and SSGA Active

-0.31

Correlation Coefficient

Amplify Thematic  SSGA Active

Very good diversification

The 3 months correlation between Amplify and SSGA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Thematic All Stars and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and Amplify Thematic 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 Thematic All Stars are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of Amplify Thematic i.e., Amplify Thematic and SSGA Active go up and down completely randomly.

Pair Corralation between Amplify Thematic and SSGA Active

Given the investment horizon of 90 days Amplify Thematic All Stars is expected to generate 6.6 times more return on investment than SSGA Active. However, Amplify Thematic is 6.6 times more volatile than SSGA Active Trust. It trades about 0.15 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.08 per unit of risk. If you would invest  2,140  in Amplify Thematic All Stars on August 30, 2024 and sell it today you would earn a total of  271.00  from holding Amplify Thematic All Stars or generate 12.66% return on investment over 90 days.

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

Amplify Thematic All Stars  vs.  SSGA Active Trust

Amplify Thematic All

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Thematic All Stars are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Amplify Thematic may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SSGA Active Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSGA Active Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SSGA Active is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Amplify Thematic and SSGA Active

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

The idea behind Amplify Thematic All Stars and SSGA Active 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.