Correlation Between Amplify BlackSwan and ETF Series
Can any of the company-specific risk be diversified away by investing in both Amplify BlackSwan and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Amplify BlackSwan and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify BlackSwan and ETF Series.
Diversification Opportunities for Amplify BlackSwan and ETF Series
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amplify and ETF is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and ETF Series go up and down completely randomly.
Pair Corralation between Amplify BlackSwan and ETF Series
Given the investment horizon of 90 days Amplify BlackSwan is expected to generate 2.18 times less return on investment than ETF Series. But when comparing it to its historical volatility, Amplify BlackSwan Growth is 1.2 times less risky than ETF Series. It trades about 0.03 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,365 in ETF Series Solutions on August 23, 2024 and sell it today you would earn a total of 92.00 from holding ETF Series Solutions or generate 2.73% 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. ETF Series Solutions
Performance |
| Timeline |
| Amplify BlackSwan Growth |
| ETF Series Solutions |
Amplify BlackSwan and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify BlackSwan and ETF Series
The main advantage of trading using opposite Amplify BlackSwan and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify BlackSwan position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
| ETF Series vs. Aptus Collared Income | ETF Series vs. Core Alternative ETF | ETF Series vs. Aptus Drawdown Managed | ETF Series vs. Amplify BlackSwan Growth |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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