Correlation Between Amplify Lithium and Global X
Can any of the company-specific risk be diversified away by investing in both Amplify Lithium 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 Lithium 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 Lithium Battery and Global X Lithium, you can compare the effects of market volatilities on Amplify Lithium 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 Lithium with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Lithium and Global X.
Diversification Opportunities for Amplify Lithium and Global X
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amplify and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Lithium Battery and Global X Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Lithium and Amplify Lithium 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 Lithium Battery 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 Lithium has no effect on the direction of Amplify Lithium i.e., Amplify Lithium and Global X go up and down completely randomly.
Pair Corralation between Amplify Lithium and Global X
Given the investment horizon of 90 days Amplify Lithium is expected to generate 3.71 times less return on investment than Global X. In addition to that, Amplify Lithium is 1.08 times more volatile than Global X Lithium. It trades about 0.02 of its total potential returns per unit of risk. Global X Lithium is currently generating about 0.1 per unit of volatility. If you would invest 4,067 in Global X Lithium on November 29, 2024 and sell it today you would earn a total of 111.00 from holding Global X Lithium or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify Lithium Battery vs. Global X Lithium
Performance |
| Timeline |
| Amplify Lithium Battery |
| Global X Lithium |
Amplify Lithium and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify Lithium and Global X
The main advantage of trading using opposite Amplify Lithium and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Lithium 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.| Amplify Lithium vs. KraneShares Electric Vehicles | Amplify Lithium vs. iShares Self Driving EV | Amplify Lithium vs. SPDR SP Kensho | Amplify Lithium vs. Global X Lithium |
| Global X vs. Invesco Solar ETF | Global X vs. Albemarle Corp | Global X vs. Lithium Americas Corp | Global X vs. iShares Global Clean |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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