Correlation Between Amplify ETF and Themes Gold

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

Diversification Opportunities for Amplify ETF and Themes Gold

0.86

Correlation Coefficient

Amplify ETF  Themes Gold

Very poor diversification

The 3 months correlation between Amplify and Themes is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Themes Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Gold Miners 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 Themes Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Gold Miners has no effect on the direction of Amplify ETF i.e., Amplify ETF and Themes Gold go up and down completely randomly.

Pair Corralation between Amplify ETF and Themes Gold

Given the investment horizon of 90 days Amplify ETF is expected to generate 11.93 times less return on investment than Themes Gold. In addition to that, Amplify ETF is 1.17 times more volatile than Themes Gold Miners. It trades about 0.0 of its total potential returns per unit of risk. Themes Gold Miners is currently generating about 0.05 per unit of volatility. If you would invest  3,510  in Themes Gold Miners on August 30, 2024 and sell it today you would earn a total of  217.00  from holding Themes Gold Miners or generate 6.18% return on investment over 90 days.

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

Amplify ETF Trust  vs.  Themes Gold Miners

Amplify ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady essential indicators, Amplify ETF is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Themes Gold Miners

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Themes Gold Miners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal primary indicators, Themes Gold may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Amplify ETF and Themes Gold

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

The idea behind Amplify ETF Trust and Themes Gold Miners 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..