Correlation Between AdvisorShares STAR and Amplify CWP
Can any of the company-specific risk be diversified away by investing in both AdvisorShares STAR and Amplify CWP 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 AdvisorShares STAR and Amplify CWP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvisorShares STAR Global and Amplify CWP Enhanced, you can compare the effects of market volatilities on AdvisorShares STAR and Amplify CWP 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 AdvisorShares STAR with a short position of Amplify CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares STAR and Amplify CWP.
Diversification Opportunities for AdvisorShares STAR and Amplify CWP
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AdvisorShares and Amplify is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares STAR Global and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced and AdvisorShares STAR 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 AdvisorShares STAR Global are associated (or correlated) with Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of AdvisorShares STAR i.e., AdvisorShares STAR and Amplify CWP go up and down completely randomly.
Pair Corralation between AdvisorShares STAR and Amplify CWP
Given the investment horizon of 90 days AdvisorShares STAR is expected to generate 1.22 times less return on investment than Amplify CWP. In addition to that, AdvisorShares STAR is 1.04 times more volatile than Amplify CWP Enhanced. It trades about 0.08 of its total potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.11 per unit of volatility. If you would invest 3,488 in Amplify CWP Enhanced on September 20, 2024 and sell it today you would earn a total of 553.00 from holding Amplify CWP Enhanced or generate 15.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AdvisorShares STAR Global vs. Amplify CWP Enhanced
Performance |
Timeline |
AdvisorShares STAR Global |
Amplify CWP Enhanced |
AdvisorShares STAR and Amplify CWP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AdvisorShares STAR and Amplify CWP
The main advantage of trading using opposite AdvisorShares STAR and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvisorShares STAR position performs unexpectedly, Amplify CWP 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 CWP will offset losses from the drop in Amplify CWP's long position.AdvisorShares STAR vs. Amplify CWP Enhanced | AdvisorShares STAR vs. Main Buywrite ETF | AdvisorShares STAR vs. International Drawdown Managed |
Amplify CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP vs. JPMorgan Equity Premium |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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