Correlation Between SCOR PK and Amplify ETF

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

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

Diversification Opportunities for SCOR PK and Amplify ETF

0.81

Correlation Coefficient

SCOR PK  Amplify ETF

Very poor diversification

The 3 months correlation between SCOR and Amplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and SCOR PK 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 SCOR PK are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of SCOR PK i.e., SCOR PK and Amplify ETF go up and down completely randomly.

Pair Corralation between SCOR PK and Amplify ETF

Assuming the 90 days horizon SCOR PK is expected to generate 1.22 times less return on investment than Amplify ETF. In addition to that, SCOR PK is 2.04 times more volatile than Amplify ETF Trust. It trades about 0.07 of its total potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.18 per unit of volatility. If you would invest  5,276  in Amplify ETF Trust on September 19, 2024 and sell it today you would earn a total of  826.00  from holding Amplify ETF Trust or generate 15.66% return on investment over 90 days.

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

SCOR PK  vs.  Amplify ETF Trust

SCOR PK

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SCOR PK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Amplify ETF Trust

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 14 (%) 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.

Pair Trading with SCOR PK and Amplify ETF

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

The idea behind SCOR PK and Amplify ETF 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.