Correlation Between Amplify CWP and International Drawdown
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and International Drawdown 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 International Drawdown 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 International Drawdown Managed, you can compare the effects of market volatilities on Amplify CWP and International Drawdown 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 International Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and International Drawdown.
Diversification Opportunities for Amplify CWP and International Drawdown
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amplify and International is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and International Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Drawdown 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 International Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Drawdown has no effect on the direction of Amplify CWP i.e., Amplify CWP and International Drawdown go up and down completely randomly.
Pair Corralation between Amplify CWP and International Drawdown
Given the investment horizon of 90 days Amplify CWP Enhanced is expected to generate 0.95 times more return on investment than International Drawdown. However, Amplify CWP Enhanced is 1.06 times less risky than International Drawdown. It trades about 0.29 of its potential returns per unit of risk. International Drawdown Managed is currently generating about -0.16 per unit of risk. If you would invest 4,069 in Amplify CWP Enhanced on August 30, 2024 and sell it today you would earn a total of 196.00 from holding Amplify CWP Enhanced or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. International Drawdown Managed
Performance |
| Timeline |
| Amplify CWP Enhanced |
| International Drawdown |
Amplify CWP and International Drawdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and International Drawdown
The main advantage of trading using opposite Amplify CWP and International Drawdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, International Drawdown 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 International Drawdown will offset losses from the drop in International Drawdown'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 |
| International Drawdown vs. Global X SP | International Drawdown vs. Amplify CWP Enhanced | International Drawdown vs. Global X Russell | International Drawdown 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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