Correlation Between Vanguard Information and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Information 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 Vanguard Information and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Information Technology and Amplify ETF Trust, you can compare the effects of market volatilities on Vanguard Information 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 Vanguard Information with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Information and Amplify ETF.
Diversification Opportunities for Vanguard Information and Amplify ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Amplify is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Information Technolog 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 Vanguard Information 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 Vanguard Information Technology 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 Vanguard Information i.e., Vanguard Information and Amplify ETF go up and down completely randomly.
Pair Corralation between Vanguard Information and Amplify ETF
Considering the 90-day investment horizon Vanguard Information is expected to generate 1.46 times less return on investment than Amplify ETF. But when comparing it to its historical volatility, Vanguard Information Technology is 1.07 times less risky than Amplify ETF. It trades about 0.11 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,018 in Amplify ETF Trust on August 26, 2024 and sell it today you would earn a total of 342.00 from holding Amplify ETF Trust or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Information Technolog vs. Amplify ETF Trust
Performance |
| Timeline |
| Vanguard Information |
| Amplify ETF Trust |
Vanguard Information and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Information and Amplify ETF
The main advantage of trading using opposite Vanguard Information and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Information 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.| Vanguard Information vs. Vanguard Health Care | Vanguard Information vs. Vanguard Growth Index | Vanguard Information vs. Vanguard Consumer Discretionary | Vanguard Information vs. Vanguard Financials Index |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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