Correlation Between Amplify ETF and Vanguard Information
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Vanguard Information 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 Information 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 Information Technology, you can compare the effects of market volatilities on Amplify ETF and Vanguard Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Vanguard Information.
Diversification Opportunities for Amplify ETF and Vanguard Information
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amplify and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Vanguard Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Information has no effect on the direction of Amplify ETF i.e., Amplify ETF and Vanguard Information go up and down completely randomly.
Pair Corralation between Amplify ETF and Vanguard Information
Given the investment horizon of 90 days Amplify ETF is expected to generate 1.3 times less return on investment than Vanguard Information. But when comparing it to its historical volatility, Amplify ETF Trust is 1.1 times less risky than Vanguard Information. It trades about 0.09 of its potential returns per unit of risk. Vanguard Information Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 33,907 in Vanguard Information Technology on September 4, 2024 and sell it today you would earn a total of 28,930 from holding Vanguard Information Technology or generate 85.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify ETF Trust vs. Vanguard Information Technolog
Performance |
| Timeline |
| Amplify ETF Trust |
| Vanguard Information |
Amplify ETF and Vanguard Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and Vanguard Information
The main advantage of trading using opposite Amplify ETF and Vanguard Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Vanguard Information 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 Information will offset losses from the drop in Vanguard Information's long position.| Amplify ETF vs. Vanguard Information Technology | Amplify ETF vs. Technology Select Sector | Amplify ETF vs. iShares Technology ETF | Amplify ETF vs. VanEck Semiconductor ETF |
| Vanguard Information vs. Vanguard Health Care | Vanguard Information vs. Vanguard Growth Index | Vanguard Information vs. Vanguard Consumer Discretionary | Vanguard Information vs. Vanguard Financials Index |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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