Correlation Between Amplify BlackSwan and Global X

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

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

Diversification Opportunities for Amplify BlackSwan and Global X

0.89

Correlation Coefficient

Amplify BlackSwan  Global X

Very poor diversification

The 3 months correlation between Amplify and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Global X Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Alternative and Amplify BlackSwan 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 Amplify BlackSwan Growth are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Alternative has no effect on the direction of Amplify BlackSwan i.e., Amplify BlackSwan and Global X go up and down completely randomly.

Pair Corralation between Amplify BlackSwan and Global X

Given the investment horizon of 90 days Amplify BlackSwan Growth is expected to generate 1.49 times more return on investment than Global X. However, Amplify BlackSwan is 1.49 times more volatile than Global X Alternative. It trades about 0.14 of its potential returns per unit of risk. Global X Alternative is currently generating about 0.2 per unit of risk. If you would invest  2,937  in Amplify BlackSwan Growth on September 2, 2024 and sell it today you would earn a total of  156.00  from holding Amplify BlackSwan Growth or generate 5.31% return on investment over 90 days.

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

Amplify BlackSwan Growth  vs.  Global X Alternative

Amplify BlackSwan Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify BlackSwan Growth are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Amplify BlackSwan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Global X Alternative

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Alternative are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Global X is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amplify BlackSwan and Global X

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

The idea behind Amplify BlackSwan Growth and Global X Alternative 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.