Correlation Between Amplify CWP and First Trust
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and First 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 First 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 First Trust Equity, you can compare the effects of market volatilities on Amplify CWP and First 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and First Trust.
Diversification Opportunities for Amplify CWP and First Trust
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amplify and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and First Trust Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Equity 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Equity has no effect on the direction of Amplify CWP i.e., Amplify CWP and First Trust go up and down completely randomly.
Pair Corralation between Amplify CWP and First Trust
Given the investment horizon of 90 days Amplify CWP Enhanced is expected to generate 0.71 times more return on investment than First Trust. However, Amplify CWP Enhanced is 1.42 times less risky than First Trust. It trades about 0.09 of its potential returns per unit of risk. First Trust Equity is currently generating about 0.05 per unit of risk. If you would invest 3,331 in Amplify CWP Enhanced on August 26, 2024 and sell it today you would earn a total of 905.00 from holding Amplify CWP Enhanced or generate 27.17% 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. First Trust Equity
Performance |
| Timeline |
| Amplify CWP Enhanced |
| First Trust Equity |
Amplify CWP and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and First Trust
The main advantage of trading using opposite Amplify CWP and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, First 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 First Trust will offset losses from the drop in First 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 |
| First Trust vs. BlackRock ETF Trust | First Trust vs. Rbb Fund | First Trust vs. Virtus ETF Trust | First Trust vs. Amplify CWP Enhanced |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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