Correlation Between IShares Semiconductor and Amplify Thematic

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

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

Diversification Opportunities for IShares Semiconductor and Amplify Thematic

-0.55

Correlation Coefficient

IShares Semiconductor  Amplify Thematic

Excellent diversification

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

Pair Corralation between IShares Semiconductor and Amplify Thematic

Given the investment horizon of 90 days iShares Semiconductor ETF is expected to under-perform the Amplify Thematic. In addition to that, IShares Semiconductor is 1.33 times more volatile than Amplify Thematic All Stars. It trades about -0.03 of its total potential returns per unit of risk. Amplify Thematic All Stars is currently generating about 0.15 per unit of volatility. If you would invest  2,187  in Amplify Thematic All Stars on September 23, 2024 and sell it today you would earn a total of  287.00  from holding Amplify Thematic All Stars or generate 13.12% return on investment over 90 days.

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

iShares Semiconductor ETF  vs.  Amplify Thematic All Stars

iShares Semiconductor ETF

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 weak basic indicators, Amplify Thematic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IShares Semiconductor and Amplify Thematic

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

The idea behind iShares Semiconductor ETF and Amplify Thematic All Stars 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.