Correlation Between Amplify BlackSwan and Invesco Fundamental

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

By analyzing existing cross correlation between Amplify BlackSwan Growth and Invesco Fundamental Investment, you can compare the effects of market volatilities on Amplify BlackSwan and Invesco Fundamental 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 BlackSwan with a short position of Invesco Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and Invesco Fundamental.

Diversification Opportunities for Amplify BlackSwan and Invesco Fundamental

-0.31

Correlation Coefficient

Amplify BlackSwan  Invesco Fundamental

Very good diversification

The 3 months correlation between Amplify and Invesco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Invesco Fundamental Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Fundamental and Amplify BlackSwan 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 BlackSwan Growth are associated (or correlated) with Invesco Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Fundamental has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and Invesco Fundamental go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and Invesco Fundamental

Given the investment horizon of 90 days Amplify BlackSwan Growth is expected to generate 2.58 times more return on investment than Invesco Fundamental. However, Amplify BlackSwan is 2.58 times more volatile than Invesco Fundamental Investment. It trades about 0.23 of its potential returns per unit of risk. Invesco Fundamental Investment is currently generating about 0.22 per unit of risk. If you would invest  2,764  in Amplify BlackSwan Growth on February 7, 2025 and sell it today you would earn a total of  110.00  from holding Amplify BlackSwan Growth or generate 3.98% return on investment over 90 days.

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

Amplify BlackSwan Growth  vs.  Invesco Fundamental Investment

Amplify BlackSwan Growth

Risk-Adjusted Performance

Very Weak

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

Invesco Fundamental

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Fundamental Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Invesco Fundamental is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amplify BlackSwan and Invesco Fundamental

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

The idea behind Amplify BlackSwan Growth and Invesco Fundamental Investment 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.