Correlation Between Amplify ETF and Vanguard Industrials
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Vanguard Industrials 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 ETF and Vanguard Industrials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify ETF Trust and Vanguard Industrials Index, you can compare the effects of market volatilities on Amplify ETF and Vanguard Industrials 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 ETF with a short position of Vanguard Industrials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Vanguard Industrials.
Diversification Opportunities for Amplify ETF and Vanguard Industrials
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and Vanguard is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Vanguard Industrials Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Industrials and Amplify ETF 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 ETF Trust are associated (or correlated) with Vanguard Industrials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Industrials has no effect on the direction of Amplify ETF i.e., Amplify ETF and Vanguard Industrials go up and down completely randomly.
Pair Corralation between Amplify ETF and Vanguard Industrials
Given the investment horizon of 90 days Amplify ETF is expected to generate 3.47 times less return on investment than Vanguard Industrials. In addition to that, Amplify ETF is 1.29 times more volatile than Vanguard Industrials Index. It trades about 0.05 of its total potential returns per unit of risk. Vanguard Industrials Index is currently generating about 0.24 per unit of volatility. If you would invest 26,089 in Vanguard Industrials Index on August 30, 2024 and sell it today you would earn a total of 1,717 from holding Vanguard Industrials Index or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. Vanguard Industrials Index
Performance |
| Timeline |
| Amplify ETF Trust |
| Vanguard Industrials |
Amplify ETF and Vanguard Industrials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and Vanguard Industrials
The main advantage of trading using opposite Amplify ETF and Vanguard Industrials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Vanguard Industrials 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 Vanguard Industrials will offset losses from the drop in Vanguard Industrials' long position.| Amplify ETF vs. VanEck Video Gaming | Amplify ETF vs. Roundhill Video Games | Amplify ETF vs. Global X Social | Amplify ETF vs. Amplify ETF Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |