Correlation Between Amplify CWP and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Amplify CWP and Vanguard Value 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 Value 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 Value Index, you can compare the effects of market volatilities on Amplify CWP and Vanguard Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Vanguard Value.
Diversification Opportunities for Amplify CWP and Vanguard Value
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 Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Amplify CWP i.e., Amplify CWP and Vanguard Value go up and down completely randomly.
Pair Corralation between Amplify CWP and Vanguard Value
Given the investment horizon of 90 days Amplify CWP is expected to generate 1.04 times less return on investment than Vanguard Value. But when comparing it to its historical volatility, Amplify CWP Enhanced is 1.22 times less risky than Vanguard Value. It trades about 0.05 of its potential returns per unit of risk. Vanguard Value Index is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13,517 in Vanguard Value Index on January 26, 2024 and sell it today you would earn a total of 2,307 from holding Vanguard Value Index or generate 17.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Vanguard Value Index
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Vanguard Value Index |
Amplify CWP and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Vanguard Value
The main advantage of trading using opposite Amplify CWP and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP position performs unexpectedly, Vanguard Value 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 Value will offset losses from the drop in Vanguard Value's long position.| Amplify CWP vs. HUMANA INC | Amplify CWP vs. Aquagold International | Amplify CWP vs. Morningstar Unconstrained Allocation | Amplify CWP vs. High Yield Municipal Fund |
| Vanguard Value vs. Hartford Multifactor Emerging | Vanguard Value vs. Hartford Multifactor Developed | Vanguard Value vs. iShares Equity Factor | Vanguard Value vs. SPDR MSCI USA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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