Correlation Between ProShares Online and Amplify Online

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

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

Diversification Opportunities for ProShares Online and Amplify Online

0.81

Correlation Coefficient

ProShares Online  Amplify Online

Very poor diversification

The 3 months correlation between ProShares and Amplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Online Retail 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 ProShares Online 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 ProShares Online Retail 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 ProShares Online i.e., ProShares Online and Amplify Online go up and down completely randomly.

Pair Corralation between ProShares Online and Amplify Online

Given the investment horizon of 90 days ProShares Online is expected to generate 1.31 times less return on investment than Amplify Online. In addition to that, ProShares Online is 1.11 times more volatile than Amplify Online Retail. It trades about 0.19 of its total potential returns per unit of risk. Amplify Online Retail is currently generating about 0.28 per unit of volatility. If you would invest  5,694  in Amplify Online Retail on September 14, 2024 and sell it today you would earn a total of  1,237  from holding Amplify Online Retail or generate 21.72% return on investment over 90 days.

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

ProShares Online Retail  vs.  Amplify Online Retail

ProShares Online Retail

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Online Retail are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, ProShares Online displayed solid returns over the last few months and may actually be approaching a breakup point.

Amplify Online Retail

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Online Retail are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Amplify Online showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ProShares Online and Amplify Online

The main advantage of trading using opposite ProShares Online and Amplify Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Online 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 ProShares Online Retail 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.