Correlation Between IShares Trust and Amplify BlackSwan

Can any of the company-specific risk be diversified away by investing in both IShares Trust and Amplify BlackSwan 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 IShares Trust and Amplify BlackSwan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Trust and Amplify BlackSwan ISWN, you can compare the effects of market volatilities on IShares Trust and Amplify BlackSwan 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 IShares Trust with a short position of Amplify BlackSwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Amplify BlackSwan.

Diversification Opportunities for IShares Trust and Amplify BlackSwan

0.83

Correlation Coefficient

IShares Trust  Amplify BlackSwan

Very poor diversification

The 3 months correlation between IShares and Amplify is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Amplify BlackSwan ISWN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify BlackSwan ISWN and IShares Trust 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 iShares Trust are associated (or correlated) with Amplify BlackSwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify BlackSwan ISWN has no effect on the direction of IShares Trust i.e., IShares Trust and Amplify BlackSwan go up and down completely randomly.

Pair Corralation between IShares Trust and Amplify BlackSwan

Given the investment horizon of 90 days iShares Trust is expected to generate 0.44 times more return on investment than Amplify BlackSwan. However, iShares Trust is 2.29 times less risky than Amplify BlackSwan. It trades about 0.02 of its potential returns per unit of risk. Amplify BlackSwan ISWN is currently generating about 0.0 per unit of risk. If you would invest  2,563  in iShares Trust on October 11, 2024 and sell it today you would earn a total of  59.00  from holding iShares Trust or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

iShares Trust   vs.  Amplify BlackSwan ISWN

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amplify BlackSwan ISWN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify BlackSwan ISWN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with IShares Trust and Amplify BlackSwan

The main advantage of trading using opposite IShares Trust and Amplify BlackSwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Amplify BlackSwan 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 BlackSwan will offset losses from the drop in Amplify BlackSwan's long position.

The idea behind iShares Trust and Amplify BlackSwan ISWN 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..