Correlation Between Cambria Cannabis and Amplify Seymour

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

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

Diversification Opportunities for Cambria Cannabis and Amplify Seymour

0.86

Correlation Coefficient

Cambria Cannabis  Amplify Seymour

Very poor diversification

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

Pair Corralation between Cambria Cannabis and Amplify Seymour

Given the investment horizon of 90 days Cambria Cannabis ETF is expected to generate 0.92 times more return on investment than Amplify Seymour. However, Cambria Cannabis ETF is 1.08 times less risky than Amplify Seymour. It trades about -0.23 of its potential returns per unit of risk. Amplify Seymour Cannabis is currently generating about -0.34 per unit of risk. If you would invest  651.00  in Cambria Cannabis ETF on March 13, 2024 and sell it today you would lose (65.00) from holding Cambria Cannabis ETF or give up 9.98% of portfolio value over 90 days.

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

Cambria Cannabis ETF  vs.  Amplify Seymour Cannabis

Cambria Cannabis ETF

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Cannabis ETF are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking signals, Cambria Cannabis is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amplify Seymour Cannabis

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Seymour Cannabis are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental drivers, Amplify Seymour may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Cambria Cannabis and Amplify Seymour

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

The idea behind Cambria Cannabis ETF and Amplify Seymour Cannabis 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .