Correlation Between Amplify ETF and MicroSectors FANG

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

Diversification Opportunities for Amplify ETF and MicroSectors FANG

0.11

Correlation Coefficient

Amplify ETF  MicroSectors FANG

Average diversification

The 3 months correlation between Amplify and MicroSectors is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of Amplify ETF i.e., Amplify ETF and MicroSectors FANG go up and down completely randomly.

Pair Corralation between Amplify ETF and MicroSectors FANG

Allowing for the 90-day total investment horizon Amplify ETF is expected to generate 5.49 times less return on investment than MicroSectors FANG. In addition to that, Amplify ETF is 2.37 times more volatile than MicroSectors FANG ETN. It trades about 0.02 of its total potential returns per unit of risk. MicroSectors FANG ETN is currently generating about 0.25 per unit of volatility. If you would invest  5,573  in MicroSectors FANG ETN on May 2, 2025 and sell it today you would earn a total of  1,046  from holding MicroSectors FANG ETN or generate 18.77% return on investment over 90 days.

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

Amplify ETF Trust  vs.  MicroSectors FANG ETN

Amplify ETF Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify ETF Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady forward-looking indicators, Amplify ETF is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

MicroSectors FANG ETN

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors FANG ETN are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, MicroSectors FANG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify ETF and MicroSectors FANG

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

The idea behind Amplify ETF Trust and MicroSectors FANG ETN 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.