Correlation Between Amplify ETF and Amplify CWP
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Amplify CWP 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 Amplify CWP 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 Amplify CWP Enhanced, you can compare the effects of market volatilities on Amplify ETF and Amplify CWP 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 Amplify CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Amplify CWP.
Diversification Opportunities for Amplify ETF and Amplify CWP
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and Amplify is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced 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 Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of Amplify ETF i.e., Amplify ETF and Amplify CWP go up and down completely randomly.
Pair Corralation between Amplify ETF and Amplify CWP
Given the investment horizon of 90 days Amplify ETF is expected to generate 1.39 times less return on investment than Amplify CWP. In addition to that, Amplify ETF is 1.55 times more volatile than Amplify CWP Enhanced. It trades about 0.08 of its total potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.17 per unit of volatility. If you would invest 3,390 in Amplify CWP Enhanced on September 4, 2024 and sell it today you would earn a total of 871.00 from holding Amplify CWP Enhanced or generate 25.69% 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. Amplify CWP Enhanced
Performance |
| Timeline |
| Amplify ETF Trust |
| Amplify CWP Enhanced |
Amplify ETF and Amplify CWP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify ETF and Amplify CWP
The main advantage of trading using opposite Amplify ETF and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Amplify CWP 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 CWP will offset losses from the drop in Amplify CWP's long position.| Amplify ETF vs. Amplify International Enhanced | Amplify ETF vs. Amplify CWP Enhanced | Amplify ETF vs. Amplify High Income | Amplify ETF vs. Amplify BlackSwan ISWN |
| Amplify CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP vs. JPMorgan Equity Premium |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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