Correlation Between First Trust and Amplify Alternative
Can any of the company-specific risk be diversified away by investing in both First Trust and Amplify Alternative 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 First Trust and Amplify Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NASDAQ and Amplify Alternative Harvest, you can compare the effects of market volatilities on First Trust and Amplify Alternative 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 First Trust with a short position of Amplify Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Amplify Alternative.
Diversification Opportunities for First Trust and Amplify Alternative
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Amplify is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and Amplify Alternative Harvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Alternative and First Trust 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 First Trust NASDAQ are associated (or correlated) with Amplify Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Alternative has no effect on the direction of First Trust i.e., First Trust and Amplify Alternative go up and down completely randomly.
Pair Corralation between First Trust and Amplify Alternative
Given the investment horizon of 90 days First Trust NASDAQ is expected to under-perform the Amplify Alternative. But the etf apears to be less risky and, when comparing its historical volatility, First Trust NASDAQ is 2.22 times less risky than Amplify Alternative. The etf trades about -0.19 of its potential returns per unit of risk. The Amplify Alternative Harvest is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 358.00 in Amplify Alternative Harvest on January 20, 2024 and sell it today you would earn a total of 22.00 from holding Amplify Alternative Harvest or generate 6.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Trust NASDAQ vs. Amplify Alternative Harvest
Performance |
Timeline |
First Trust NASDAQ |
Amplify Alternative |
First Trust and Amplify Alternative Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust and Amplify Alternative
The main advantage of trading using opposite First Trust and Amplify Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Amplify Alternative 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 Alternative will offset losses from the drop in Amplify Alternative's long position.First Trust vs. Invesco Global Listed | First Trust vs. VanEck BDC Income | First Trust vs. ProShares DJ Brookfield | First Trust vs. HUMANA INC |
Amplify Alternative vs. Invesco Global Listed | Amplify Alternative vs. VanEck BDC Income | Amplify Alternative vs. ProShares DJ Brookfield | Amplify Alternative vs. HUMANA INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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