Correlation Between Amplify ETF and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Amplify ETF and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Amplify ETF and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and Dow Jones.
Diversification Opportunities for Amplify ETF and Dow Jones
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and Dow is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Amplify ETF i.e., Amplify ETF and Dow Jones go up and down completely randomly.
Pair Corralation between Amplify ETF and Dow Jones
Given the investment horizon of 90 days Amplify ETF Trust is expected to generate 1.64 times more return on investment than Dow Jones. However, Amplify ETF is 1.64 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 2,875 in Amplify ETF Trust on September 12, 2024 and sell it today you would earn a total of 6.82 from holding Amplify ETF Trust or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amplify ETF Trust vs. Dow Jones Industrial
Performance |
| Timeline |
Amplify ETF and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Amplify ETF Trust
Pair trading matchups for Amplify ETF
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Amplify ETF and Dow Jones
The main advantage of trading using opposite Amplify ETF and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Amplify ETF vs. Invesco SP 500 | Amplify ETF vs. Invesco SP 500 | Amplify ETF vs. Invesco SP 500 | Amplify ETF vs. Aquagold International |
| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |