Correlation Between Amplify Transformational and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Amplify Transformational and SPDR Galaxy 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 Transformational and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amplify Transformational Data and SPDR Galaxy Hedged, you can compare the effects of market volatilities on Amplify Transformational and SPDR Galaxy 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 Transformational with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify Transformational and SPDR Galaxy.
Diversification Opportunities for Amplify Transformational and SPDR Galaxy
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amplify and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Amplify Transformational Data and SPDR Galaxy Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Hedged and Amplify Transformational 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 Transformational Data are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Hedged has no effect on the direction of Amplify Transformational i.e., Amplify Transformational and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Amplify Transformational and SPDR Galaxy
Given the investment horizon of 90 days Amplify Transformational is expected to generate 2.01 times less return on investment than SPDR Galaxy. But when comparing it to its historical volatility, Amplify Transformational Data is 1.22 times less risky than SPDR Galaxy. It trades about 0.12 of its potential returns per unit of risk. SPDR Galaxy Hedged is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,525 in SPDR Galaxy Hedged on September 12, 2024 and sell it today you would earn a total of 1,113 from holding SPDR Galaxy Hedged or generate 44.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 19.94% |
| Values | Daily Returns |
Amplify Transformational Data vs. SPDR Galaxy Hedged
Performance |
| Timeline |
| Amplify Transformational |
| SPDR Galaxy Hedged |
Amplify Transformational and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify Transformational and SPDR Galaxy
The main advantage of trading using opposite Amplify Transformational and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify Transformational position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| Amplify Transformational vs. Grayscale Bitcoin Trust | Amplify Transformational vs. Siren Nasdaq NexGen | Amplify Transformational vs. First Trust Indxx | Amplify Transformational vs. Bitwise Crypto Industry |
| SPDR Galaxy vs. Grayscale Bitcoin Trust | SPDR Galaxy vs. Siren Nasdaq NexGen | SPDR Galaxy vs. First Trust Indxx | SPDR Galaxy vs. Bitwise Crypto Industry |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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