Correlation Between First Trust and Amplify High

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

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

Diversification Opportunities for First Trust and Amplify High

0.98

Correlation Coefficient

First Trust  Amplify High

Almost no diversification

The 3 months correlation between First and Amplify is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Dorsey 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 First Trust 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 First Trust Dorsey 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 First Trust i.e., First Trust and Amplify High go up and down completely randomly.

Pair Corralation between First Trust and Amplify High

Considering the 90-day investment horizon First Trust is expected to generate 2.35 times less return on investment than Amplify High. But when comparing it to its historical volatility, First Trust Dorsey is 1.85 times less risky than Amplify High. It trades about 0.28 of its potential returns per unit of risk. Amplify High Income is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  1,047  in Amplify High Income on April 22, 2025 and sell it today you would earn a total of  124.00  from holding Amplify High Income or generate 11.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

First Trust Dorsey  vs.  Amplify High Income

First Trust Dorsey

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Dorsey are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, First Trust is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amplify High Income

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify High Income are ranked lower than 28 (%) 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 First Trust and Amplify High

The main advantage of trading using opposite First Trust and Amplify High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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 First Trust Dorsey 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.