Correlation Between Amplify CWP and IShares Select
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and IShares Select 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 CWP and IShares Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify CWP Enhanced and IShares Select Dividend, you can compare the effects of market volatilities on Amplify CWP and IShares Select 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 CWP with a short position of IShares Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and IShares Select.
Diversification Opportunities for Amplify CWP and IShares Select
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amplify and IShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and IShares Select Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares Select Dividend and Amplify CWP 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 CWP Enhanced are associated (or correlated) with IShares Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares Select Dividend has no effect on the direction of Amplify CWP i.e., Amplify CWP and IShares Select go up and down completely randomly.
Pair Corralation between Amplify CWP and IShares Select
Given the investment horizon of 90 days Amplify CWP is expected to generate 1.87 times less return on investment than IShares Select. But when comparing it to its historical volatility, Amplify CWP Enhanced is 1.66 times less risky than IShares Select. It trades about 0.35 of its potential returns per unit of risk. IShares Select Dividend is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 11,531 in IShares Select Dividend on December 29, 2023 and sell it today you would earn a total of 713.00 from holding IShares Select Dividend or generate 6.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amplify CWP Enhanced vs. IShares Select Dividend
Performance |
Timeline |
Amplify CWP Enhanced |
IShares Select Dividend |
Amplify CWP and IShares Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amplify CWP and IShares Select
The main advantage of trading using opposite Amplify CWP and IShares Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, IShares Select 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 IShares Select will offset losses from the drop in IShares Select's long position.Amplify CWP vs. Franklin Templeton ETF | Amplify CWP vs. Altrius Global Dividend | Amplify CWP vs. Invesco Exchange Traded | Amplify CWP vs. Franklin International Core |
IShares Select vs. Franklin Templeton ETF | IShares Select vs. Altrius Global Dividend | IShares Select vs. Invesco Exchange Traded | IShares Select vs. Franklin International Core |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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