Correlation Between Alerian MLP and Amplify High

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

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

Diversification Opportunities for Alerian MLP and Amplify High

0.59

Correlation Coefficient

Alerian MLP  Amplify High

Very weak diversification

The 3 months correlation between Alerian and Amplify is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alerian MLP ETF and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High Income and Alerian MLP 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 Alerian MLP ETF are associated (or correlated) with Amplify High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of Alerian MLP i.e., Alerian MLP and Amplify High go up and down completely randomly.

Pair Corralation between Alerian MLP and Amplify High

Given the investment horizon of 90 days Alerian MLP is expected to generate 1.25 times less return on investment than Amplify High. In addition to that, Alerian MLP is 1.9 times more volatile than Amplify High Income. It trades about 0.11 of its total potential returns per unit of risk. Amplify High Income is currently generating about 0.27 per unit of volatility. If you would invest  1,096  in Amplify High Income on May 1, 2025 and sell it today you would earn a total of  83.00  from holding Amplify High Income or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Alerian MLP ETF  vs.  Amplify High Income

Alerian MLP ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alerian MLP ETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Alerian MLP is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Amplify High Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify High Income are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Amplify High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Alerian MLP and Amplify High

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

The idea behind Alerian MLP ETF and Amplify High Income 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.