Correlation Between Global X and Amplify

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

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

Diversification Opportunities for Global X and Amplify

-0.4

Correlation Coefficient

Global X  Amplify

Very good diversification

The 3 months correlation between Global and Amplify is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify and Global X 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 Global X Funds are associated (or correlated) with Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of Global X i.e., Global X and Amplify go up and down completely randomly.

Pair Corralation between Global X and Amplify

Considering the 90-day investment horizon Global X Funds is expected to generate 0.18 times more return on investment than Amplify. However, Global X Funds is 5.45 times less risky than Amplify. It trades about 0.02 of its potential returns per unit of risk. Amplify is currently generating about -0.05 per unit of risk. If you would invest  2,465  in Global X Funds on October 11, 2024 and sell it today you would earn a total of  149.00  from holding Global X Funds or generate 6.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.56%
Values	Daily Returns

Global X Funds  vs.  Amplify

Global X Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Funds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Amplify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Amplify is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Global X and Amplify

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

The idea behind Global X Funds and Amplify 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.