Correlation Between IShares Trust and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both IShares Trust and Amplify ETF 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 IShares Trust and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Amplify ETF Trust, you can compare the effects of market volatilities on IShares Trust and Amplify ETF 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 IShares Trust with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Amplify ETF.
Diversification Opportunities for IShares Trust and Amplify ETF
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Amplify is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and IShares Trust 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 iShares Trust are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of IShares Trust i.e., IShares Trust and Amplify ETF go up and down completely randomly.
Pair Corralation between IShares Trust and Amplify ETF
Given the investment horizon of 90 days IShares Trust is expected to generate 2.06 times less return on investment than Amplify ETF. But when comparing it to its historical volatility, iShares Trust is 5.12 times less risky than Amplify ETF. It trades about 0.19 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,516 in Amplify ETF Trust on September 4, 2024 and sell it today you would earn a total of 430.00 from holding Amplify ETF Trust or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
iShares Trust vs. Amplify ETF Trust
Performance |
| Timeline |
| iShares Trust |
| Amplify ETF Trust |
IShares Trust and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Amplify ETF
The main advantage of trading using opposite IShares Trust and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Amplify ETF 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 Amplify ETF will offset losses from the drop in Amplify ETF's long position.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. Simplify Volatility Premium | IShares Trust vs. Tidal Trust II |
| Amplify ETF vs. Amplify International Enhanced | Amplify ETF vs. Amplify CWP Enhanced | Amplify ETF vs. Amplify High Income | Amplify ETF vs. Amplify BlackSwan ISWN |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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