Correlation Between Amplify CWP and Capital Group
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Capital Group 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 CWP and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify CWP Enhanced and Capital Group Dividend, you can compare the effects of market volatilities on Amplify CWP and Capital Group 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 CWP with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Capital Group.
Diversification Opportunities for Amplify CWP and Capital Group
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amplify and Capital is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and Capital Group Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Dividend and Amplify CWP 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 CWP Enhanced are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Dividend has no effect on the direction of Amplify CWP i.e., Amplify CWP and Capital Group go up and down completely randomly.
Pair Corralation between Amplify CWP and Capital Group
Given the investment horizon of 90 days Amplify CWP Enhanced is expected to generate 0.84 times more return on investment than Capital Group. However, Amplify CWP Enhanced is 1.18 times less risky than Capital Group. It trades about 0.18 of its potential returns per unit of risk. Capital Group Dividend is currently generating about 0.14 per unit of risk. If you would invest 3,737 in Amplify CWP Enhanced on August 30, 2024 and sell it today you would earn a total of 528.00 from holding Amplify CWP Enhanced or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Capital Group Dividend
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Capital Group Dividend |
Amplify CWP and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Capital Group
The main advantage of trading using opposite Amplify CWP and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| Amplify CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP vs. JPMorgan Equity Premium |
| Capital Group vs. Capital Group Growth | Capital Group vs. Capital Group Core | Capital Group vs. Capital Group Global | Capital Group vs. Capital Group International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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