Correlation Between VanEck Pharmaceutical and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Pharmaceutical 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 VanEck Pharmaceutical and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Pharmaceutical ETF and Amplify ETF Trust, you can compare the effects of market volatilities on VanEck Pharmaceutical 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 VanEck Pharmaceutical with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Pharmaceutical and Amplify ETF.
Diversification Opportunities for VanEck Pharmaceutical and Amplify ETF
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and Amplify is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Pharmaceutical ETF 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 VanEck Pharmaceutical 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 VanEck Pharmaceutical ETF 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 VanEck Pharmaceutical i.e., VanEck Pharmaceutical and Amplify ETF go up and down completely randomly.
Pair Corralation between VanEck Pharmaceutical and Amplify ETF
Considering the 90-day investment horizon VanEck Pharmaceutical ETF is expected to under-perform the Amplify ETF. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Pharmaceutical ETF is 1.23 times less risky than Amplify ETF. The etf trades about -0.1 of its potential returns per unit of risk. The Amplify ETF Trust is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,057 in Amplify ETF Trust on August 31, 2024 and sell it today you would earn a total of 148.00 from holding Amplify ETF Trust or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Pharmaceutical ETF vs. Amplify ETF Trust
Performance |
| Timeline |
| VanEck Pharmaceutical ETF |
| Amplify ETF Trust |
VanEck Pharmaceutical and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Pharmaceutical and Amplify ETF
The main advantage of trading using opposite VanEck Pharmaceutical and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Pharmaceutical 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.| VanEck Pharmaceutical vs. VanEck Biotech ETF | VanEck Pharmaceutical vs. VanEck Retail ETF | VanEck Pharmaceutical vs. iShares Healthcare ETF | VanEck Pharmaceutical vs. iShares Telecommunications ETF |
| Amplify ETF vs. Invesco Dynamic Leisure | Amplify ETF vs. US Global Jets | Amplify ETF vs. Global X Infrastructure | Amplify ETF vs. ProShares Online Retail |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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