Correlation Between Amplify ETF and Stone Ridge

Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Stone Ridge 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 Stone Ridge 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 Stone Ridge 2056, you can compare the effects of market volatilities on Amplify ETF and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Stone Ridge.

Diversification Opportunities for Amplify ETF and Stone Ridge

-0.35

Correlation Coefficient

Amplify ETF  Stone Ridge

Very good diversification

The 3 months correlation between Amplify and Stone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Stone Ridge 2056 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2056 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2056 has no effect on the direction of Amplify ETF i.e., Amplify ETF and Stone Ridge go up and down completely randomly.

Pair Corralation between Amplify ETF and Stone Ridge

Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 4.33 times more return on investment than Stone Ridge. However, Amplify ETF is 4.33 times more volatile than Stone Ridge 2056. It trades about 0.04 of its potential returns per unit of risk. Stone Ridge 2056 is currently generating about 0.0 per unit of risk. If you would invest  1,111  in Amplify ETF Trust on February 3, 2025 and sell it today you would earn a total of  58.00  from holding Amplify ETF Trust or generate 5.22% return on investment over 90 days.

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

Amplify ETF Trust  vs.  Stone Ridge 2056

Amplify ETF Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Amplify ETF may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Stone Ridge 2056

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stone Ridge 2056 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Stone Ridge is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amplify ETF and Stone Ridge

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

The idea behind Amplify ETF Trust and Stone Ridge 2056 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.