Correlation Between Amplify High and Invesco KBW

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

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

Diversification Opportunities for Amplify High and Invesco KBW

0.91

Correlation Coefficient

Amplify High  Invesco KBW

Almost no diversification

The 3 months correlation between Amplify and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Amplify High Income and Invesco KBW High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco KBW High and Amplify High 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 High Income are associated (or correlated) with Invesco KBW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco KBW High has no effect on the direction of Amplify High i.e., Amplify High and Invesco KBW go up and down completely randomly.

Pair Corralation between Amplify High and Invesco KBW

Considering the 90-day investment horizon Amplify High is expected to generate 1.08 times less return on investment than Invesco KBW. But when comparing it to its historical volatility, Amplify High Income is 2.15 times less risky than Invesco KBW. It trades about 0.32 of its potential returns per unit of risk. Invesco KBW High is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,306  in Invesco KBW High on April 25, 2025 and sell it today you would earn a total of  124.00  from holding Invesco KBW High or generate 9.49% return on investment over 90 days.

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

Amplify High Income  vs.  Invesco KBW High

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 25 (%) 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.

Invesco KBW High

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco KBW High are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Invesco KBW may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Amplify High and Invesco KBW

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

The idea behind Amplify High Income and Invesco KBW High 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 Global Correlations module to find global opportunities by holding instruments from different markets.