Correlation Between Amplify CWP and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Pacer Cash 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 Pacer Cash 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 Pacer Cash Cows, you can compare the effects of market volatilities on Amplify CWP and Pacer Cash 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 Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Pacer Cash.
Diversification Opportunities for Amplify CWP and Pacer Cash
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amplify and Pacer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows 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 Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of Amplify CWP i.e., Amplify CWP and Pacer Cash go up and down completely randomly.
Pair Corralation between Amplify CWP and Pacer Cash
Given the investment horizon of 90 days Amplify CWP is expected to generate 1.43 times less return on investment than Pacer Cash. In addition to that, Amplify CWP is 1.02 times more volatile than Pacer Cash Cows. It trades about 0.27 of its total potential returns per unit of risk. Pacer Cash Cows is currently generating about 0.39 per unit of volatility. If you would invest 5,583 in Pacer Cash Cows on October 20, 2024 and sell it today you would earn a total of 259.00 from holding Pacer Cash Cows or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Pacer Cash Cows
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Pacer Cash Cows |
Amplify CWP and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Pacer Cash
The main advantage of trading using opposite Amplify CWP and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Pacer Cash 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 Pacer Cash will offset losses from the drop in Pacer Cash'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 |
| Pacer Cash vs. Pacer Small Cap | Pacer Cash vs. Pacer Global Cash | Pacer Cash vs. Amplify CWP Enhanced | Pacer Cash vs. JPMorgan Nasdaq Equity |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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