Correlation Between Amplify CWP and Vanguard Mid
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Vanguard Mid 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 Mid 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 Mid Cap Index, you can compare the effects of market volatilities on Amplify CWP and Vanguard Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Vanguard Mid.
Diversification Opportunities for Amplify CWP and Vanguard Mid
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amplify and Vanguard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Amplify CWP Enhanced and Vanguard Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Amplify CWP i.e., Amplify CWP and Vanguard Mid go up and down completely randomly.
Pair Corralation between Amplify CWP and Vanguard Mid
Given the investment horizon of 90 days Amplify CWP Enhanced is expected to generate 0.64 times more return on investment than Vanguard Mid. However, Amplify CWP Enhanced is 1.57 times less risky than Vanguard Mid. It trades about -0.2 of its potential returns per unit of risk. Vanguard Mid Cap Index is currently generating about -0.25 per unit of risk. If you would invest 3,859 in Amplify CWP Enhanced on January 20, 2024 and sell it today you would lose (81.00) from holding Amplify CWP Enhanced or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Vanguard Mid Cap Index
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Vanguard Mid Cap |
Amplify CWP and Vanguard Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Vanguard Mid
The main advantage of trading using opposite Amplify CWP and Vanguard Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Vanguard Mid 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 Mid will offset losses from the drop in Vanguard Mid's long position.| Amplify CWP vs. Nationwide Nasdaq 100 Risk Managed | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP vs. JPMorgan Equity Premium |
| Vanguard Mid vs. Vanguard Small Cap Index | Vanguard Mid vs. Vanguard Large Cap Index | Vanguard Mid vs. Vanguard Small Cap Growth | Vanguard Mid vs. Vanguard Small Cap Value |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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