Correlation Between Amplify High and Global X

Can any of the company-specific risk be diversified away by investing in both Amplify High 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 High 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 High Income and Global X Alternative, you can compare the effects of market volatilities on Amplify High 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 High with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify High and Global X.

Diversification Opportunities for Amplify High and Global X

0.64

Correlation Coefficient

Amplify High  Global X

Poor diversification

The 3 months correlation between Amplify and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amplify High Income 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 High 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 High Income 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 High i.e., Amplify High and Global X go up and down completely randomly.

Pair Corralation between Amplify High and Global X

Considering the 90-day investment horizon Amplify High is expected to generate 2.38 times less return on investment than Global X. In addition to that, Amplify High is 1.2 times more volatile than Global X Alternative. It trades about 0.04 of its total potential returns per unit of risk. Global X Alternative is currently generating about 0.1 per unit of volatility. If you would invest  1,157  in Global X Alternative on October 25, 2024 and sell it today you would earn a total of  35.00  from holding Global X Alternative or generate 3.03% return on investment over 90 days.

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

Amplify High Income  vs.  Global X Alternative

Amplify High Income

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify High Income are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amplify High is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Global X Alternative

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Alternative are ranked lower than 8 (%) 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 High and Global X

The main advantage of trading using opposite Amplify High and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify High 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 High Income 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.