Correlation Between Vanguard Total and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Amplify ETF Trust, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Amplify ETF.
Diversification Opportunities for Vanguard Total and Amplify ETF
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Amplify is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond 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 Vanguard Total 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 Vanguard Total Bond 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 Vanguard Total i.e., Vanguard Total and Amplify ETF go up and down completely randomly.
Pair Corralation between Vanguard Total and Amplify ETF
Considering the 90-day investment horizon Vanguard Total is expected to generate 3.13 times less return on investment than Amplify ETF. But when comparing it to its historical volatility, Vanguard Total Bond is 4.12 times less risky than Amplify ETF. It trades about 0.07 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,583 in Amplify ETF Trust on August 30, 2024 and sell it today you would earn a total of 108.00 from holding Amplify ETF Trust or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. Amplify ETF Trust
Performance |
| Timeline |
| Vanguard Total Bond |
| Amplify ETF Trust |
Vanguard Total and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Amplify ETF
The main advantage of trading using opposite Vanguard Total and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Real Estate |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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