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 SP, 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

0.82

Correlation Coefficient

Amplify BlackSwan  Global X

Very poor diversification

The 3 months correlation between Amplify and Global is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amplify BlackSwan Growth and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP 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 SP 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 under-perform the Global X. In addition to that, Amplify BlackSwan is 1.16 times more volatile than Global X SP. It trades about -0.03 of its total potential returns per unit of risk. Global X SP is currently generating about 0.05 per unit of volatility. If you would invest  2,816  in Global X SP on October 26, 2024 and sell it today you would earn a total of  35.00  from holding Global X SP or generate 1.24% 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 SP

Amplify BlackSwan Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify BlackSwan Growth are ranked lower than 1 (%) 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 SP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Global X is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail 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 SP 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.