Correlation Between Amplify BlackSwan and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both Amplify BlackSwan and Swan Hedged 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 Swan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify BlackSwan Growth and Swan Hedged Equity, you can compare the effects of market volatilities on Amplify BlackSwan and Swan Hedged 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 Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and Swan Hedged.
Diversification Opportunities for Amplify BlackSwan and Swan Hedged
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and Swan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity 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 Growth are associated (or correlated) with Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and Swan Hedged go up and down completely randomly.
Pair Corralation between Amplify BlackSwan and Swan Hedged
Given the investment horizon of 90 days Amplify BlackSwan is expected to generate 1.25 times less return on investment than Swan Hedged. In addition to that, Amplify BlackSwan is 1.51 times more volatile than Swan Hedged Equity. It trades about 0.07 of its total potential returns per unit of risk. Swan Hedged Equity is currently generating about 0.13 per unit of volatility. If you would invest 2,206 in Swan Hedged Equity on November 1, 2024 and sell it today you would earn a total of 90.00 from holding Swan Hedged Equity or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify BlackSwan Growth vs. Swan Hedged Equity
Performance |
| Timeline |
| Amplify BlackSwan Growth |
| Swan Hedged Equity |
Amplify BlackSwan and Swan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify BlackSwan and Swan Hedged
The main advantage of trading using opposite Amplify BlackSwan and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify BlackSwan position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged's long position.| Amplify BlackSwan vs. WisdomTree 9060 Balanced | Amplify BlackSwan vs. RPAR Risk Parity | Amplify BlackSwan vs. Cambria Tail Risk | Amplify BlackSwan vs. Aptus Defined Risk |
| Swan Hedged vs. Amplify BlackSwan Growth | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. Simplify Exchange Traded | Swan Hedged vs. Simplify Equity PLUS |
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 CEOs Directory module to screen CEOs from public companies around the world.
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