Correlation Between SPDR Galaxy and Amplify Transformational

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

By analyzing existing cross correlation between SPDR Galaxy Digital and Amplify Transformational Data, you can compare the effects of market volatilities on SPDR Galaxy and Amplify Transformational 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 SPDR Galaxy with a short position of Amplify Transformational. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Galaxy and Amplify Transformational.

Diversification Opportunities for SPDR Galaxy and Amplify Transformational

0.98

Correlation Coefficient

SPDR Galaxy  Amplify Transformational

Almost no diversification

The 3 months correlation between SPDR and Amplify is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Galaxy Digital and Amplify Transformational Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Transformational and SPDR Galaxy 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 SPDR Galaxy Digital are associated (or correlated) with Amplify Transformational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Transformational has no effect on the direction of SPDR Galaxy i.e., SPDR Galaxy and Amplify Transformational go up and down completely randomly.

Pair Corralation between SPDR Galaxy and Amplify Transformational

Given the investment horizon of 90 days SPDR Galaxy Digital is expected to generate 1.39 times more return on investment than Amplify Transformational. However, SPDR Galaxy is 1.39 times more volatile than Amplify Transformational Data. It trades about 0.16 of its potential returns per unit of risk. Amplify Transformational Data is currently generating about 0.11 per unit of risk. If you would invest  2,529  in SPDR Galaxy Digital on September 23, 2024 and sell it today you would earn a total of  1,078  from holding SPDR Galaxy Digital or generate 42.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	14.89%
Values	Daily Returns

SPDR Galaxy Digital  vs.  Amplify Transformational Data

SPDR Galaxy Digital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Galaxy Digital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, SPDR Galaxy displayed solid returns over the last few months and may actually be approaching a breakup point.

Amplify Transformational

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Transformational Data are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Amplify Transformational disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR Galaxy and Amplify Transformational

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

The idea behind SPDR Galaxy Digital and Amplify Transformational Data 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.