Correlation Between Amplify BlackSwan and VCLO
Can any of the company-specific risk be diversified away by investing in both Amplify BlackSwan and VCLO 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 BlackSwan and VCLO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify BlackSwan ISWN and VCLO, you can compare the effects of market volatilities on Amplify BlackSwan and VCLO 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 BlackSwan with a short position of VCLO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and VCLO.
Diversification Opportunities for Amplify BlackSwan and VCLO
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and VCLO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan ISWN and VCLO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCLO and Amplify BlackSwan 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 BlackSwan ISWN are associated (or correlated) with VCLO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCLO has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and VCLO go up and down completely randomly.
Pair Corralation between Amplify BlackSwan and VCLO
Given the investment horizon of 90 days Amplify BlackSwan ISWN is expected to generate 0.38 times more return on investment than VCLO. However, Amplify BlackSwan ISWN is 2.6 times less risky than VCLO. It trades about 0.01 of its potential returns per unit of risk. VCLO is currently generating about -0.06 per unit of risk. If you would invest 1,800 in Amplify BlackSwan ISWN on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Amplify BlackSwan ISWN or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 21.62% |
| Values | Daily Returns |
Amplify BlackSwan ISWN vs. VCLO
Performance |
| Timeline |
| Amplify BlackSwan ISWN |
| VCLO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amplify BlackSwan and VCLO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify BlackSwan and VCLO
The main advantage of trading using opposite Amplify BlackSwan and VCLO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify BlackSwan position performs unexpectedly, VCLO 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 VCLO will offset losses from the drop in VCLO's long position.| Amplify BlackSwan vs. Amplify BlackSwan Growth | Amplify BlackSwan vs. Amplify ETF Trust | Amplify BlackSwan vs. Amplify Thematic All Stars | Amplify BlackSwan vs. Aptus Defined Risk |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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