Correlation Between Amplify CWP and Vanguard Dividend

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Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Vanguard Dividend 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 Vanguard Dividend 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 Vanguard Dividend Appreciation, you can compare the effects of market volatilities on Amplify CWP and Vanguard Dividend 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 Vanguard Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Vanguard Dividend.

Diversification Opportunities for Amplify CWP and Vanguard Dividend

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between Amplify and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and Vanguard Dividend Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 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 Vanguard Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Dividend has no effect on the direction of Amplify CWP i.e., Amplify CWP and Vanguard Dividend go up and down completely randomly.

Pair Corralation between Amplify CWP and Vanguard Dividend

Given the investment horizon of 90 days Amplify CWP Enhanced is expected to generate 0.75 times more return on investment than Vanguard Dividend. However, Amplify CWP Enhanced is 1.34 times less risky than Vanguard Dividend. It trades about 0.35 of its potential returns per unit of risk. Vanguard Dividend Appreciation is currently generating about 0.22 per unit of risk. If you would invest  3,758  in Amplify CWP Enhanced on December 29, 2023 and sell it today you would earn a total of  123.00  from holding Amplify CWP Enhanced or generate 3.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Amplify CWP Enhanced  vs.  Vanguard Dividend Appreciation

 Performance 
       Timeline  
Amplify CWP Enhanced 

Risk-Adjusted Performance

20 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amplify CWP Enhanced are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Amplify CWP may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Vanguard Dividend 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Dividend Appreciation are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Vanguard Dividend may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Amplify CWP and Vanguard Dividend Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amplify CWP and Vanguard Dividend

The main advantage of trading using opposite Amplify CWP and Vanguard Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Vanguard Dividend 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 Vanguard Dividend will offset losses from the drop in Vanguard Dividend's long position.
The idea behind Amplify CWP Enhanced and Vanguard Dividend Appreciation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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