Correlation Between Amplify CWP and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Tidal Trust 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 Tidal Trust 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 Tidal Trust II, you can compare the effects of market volatilities on Amplify CWP and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Tidal Trust.
Diversification Opportunities for Amplify CWP and Tidal Trust
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and Tidal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Amplify CWP i.e., Amplify CWP and Tidal Trust go up and down completely randomly.
Pair Corralation between Amplify CWP and Tidal Trust
Given the investment horizon of 90 days Amplify CWP is expected to generate 5.09 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, Amplify CWP Enhanced is 2.21 times less risky than Tidal Trust. It trades about 0.13 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,581 in Tidal Trust II on August 24, 2024 and sell it today you would earn a total of 167.00 from holding Tidal Trust II or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Tidal Trust II
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Tidal Trust II |
Amplify CWP and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Tidal Trust
The main advantage of trading using opposite Amplify CWP and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust'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 |
| Tidal Trust vs. Franklin Templeton ETF | Tidal Trust vs. Tidal Trust II | Tidal Trust vs. iShares Dividend and | Tidal Trust vs. Altrius Global Dividend |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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