Correlation Between Touchstone ETF and Amplify CWP

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Can any of the company-specific risk be diversified away by investing in both Touchstone ETF 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 Touchstone ETF and Amplify CWP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone ETF Trust and Amplify CWP Enhanced, you can compare the effects of market volatilities on Touchstone ETF 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 Touchstone ETF with a short position of Amplify CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone ETF and Amplify CWP.

Diversification Opportunities for Touchstone ETF and Amplify CWP

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Touchstone and Amplify is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone ETF Trust 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 Touchstone ETF 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 Touchstone ETF Trust 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 Touchstone ETF i.e., Touchstone ETF and Amplify CWP go up and down completely randomly.

Pair Corralation between Touchstone ETF and Amplify CWP

Given the investment horizon of 90 days Touchstone ETF is expected to generate 17.83 times less return on investment than Amplify CWP. In addition to that, Touchstone ETF is 1.16 times more volatile than Amplify CWP Enhanced. It trades about 0.01 of its total potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.17 per unit of volatility. If you would invest  3,692  in Amplify CWP Enhanced on November 24, 2023 and sell it today you would earn a total of  66.00  from holding Amplify CWP Enhanced or generate 1.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Touchstone ETF Trust  vs.  Amplify CWP Enhanced

 Performance 
       Timeline  
Touchstone ETF Trust 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone ETF Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Touchstone ETF is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Amplify CWP Enhanced 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amplify CWP Enhanced are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amplify CWP is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Touchstone ETF and Amplify CWP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Touchstone ETF and Amplify CWP

The main advantage of trading using opposite Touchstone ETF and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone ETF 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.
The idea behind Touchstone ETF Trust and Amplify CWP Enhanced 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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