Correlation Between Amplify High and Regents Park
Can any of the company-specific risk be diversified away by investing in both Amplify High and Regents Park 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 High and Regents Park into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify High Income and Regents Park Hedged, you can compare the effects of market volatilities on Amplify High and Regents Park 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 High with a short position of Regents Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify High and Regents Park.
Diversification Opportunities for Amplify High and Regents Park
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amplify and Regents is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amplify High Income and Regents Park Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regents Park Hedged and Amplify High 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 High Income are associated (or correlated) with Regents Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regents Park Hedged has no effect on the direction of Amplify High i.e., Amplify High and Regents Park go up and down completely randomly.
Pair Corralation between Amplify High and Regents Park
Considering the 90-day investment horizon Amplify High is expected to generate 2.49 times less return on investment than Regents Park. But when comparing it to its historical volatility, Amplify High Income is 1.19 times less risky than Regents Park. It trades about 0.2 of its potential returns per unit of risk. Regents Park Hedged is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Regents Park Hedged on July 14, 2024 and sell it today you would earn a total of 38.00 from holding Regents Park Hedged or generate 3.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amplify High Income vs. Regents Park Hedged
Performance |
Timeline |
Amplify High Income |
Regents Park Hedged |
Amplify High and Regents Park Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amplify High and Regents Park
The main advantage of trading using opposite Amplify High and Regents Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify High position performs unexpectedly, Regents Park 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 Regents Park will offset losses from the drop in Regents Park's long position.Amplify High vs. Cambria Global Asset | Amplify High vs. Cambria Global Value | Amplify High vs. Cambria Foreign Shareholder | Amplify High vs. Cambria Value and |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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