Correlation Between IShares MSCI and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Amplify ETF 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 IShares MSCI and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Global and Amplify ETF Trust, you can compare the effects of market volatilities on IShares MSCI and Amplify ETF 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 IShares MSCI with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Amplify ETF.
Diversification Opportunities for IShares MSCI and Amplify ETF
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Amplify is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and IShares MSCI 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 iShares MSCI Global are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and Amplify ETF go up and down completely randomly.
Pair Corralation between IShares MSCI and Amplify ETF
Given the investment horizon of 90 days IShares MSCI is expected to generate 1.28 times less return on investment than Amplify ETF. But when comparing it to its historical volatility, iShares MSCI Global is 1.44 times less risky than Amplify ETF. It trades about 0.3 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,137 in Amplify ETF Trust on September 2, 2024 and sell it today you would earn a total of 83.00 from holding Amplify ETF Trust or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Global vs. Amplify ETF Trust
Performance |
| Timeline |
| iShares MSCI Global |
| Amplify ETF Trust |
IShares MSCI and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Amplify ETF
The main advantage of trading using opposite IShares MSCI and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Amplify ETF 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 ETF will offset losses from the drop in Amplify ETF's long position.| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
| Amplify ETF vs. Amplify BlackSwan ISWN | Amplify ETF vs. Amplify BlackSwan Growth | Amplify ETF vs. Amplify Thematic All Stars | Amplify ETF vs. Amplify ETF Trust |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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