Correlation Between Amplify CWP and Global X
Can any of the company-specific risk be diversified away by investing in both Amplify CWP 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 CWP 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 CWP Enhanced and Global X Russell, you can compare the effects of market volatilities on Amplify CWP 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 CWP with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify CWP and Global X.
Diversification Opportunities for Amplify CWP and Global X
0.89 | Correlation Coefficient |
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 CWP Enhanced and Global X Russell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Russell and Amplify CWP 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 CWP Enhanced 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 Russell has no effect on the direction of Amplify CWP i.e., Amplify CWP and Global X go up and down completely randomly.
Pair Corralation between Amplify CWP and Global X
Given the investment horizon of 90 days Amplify CWP is expected to generate 1.3 times less return on investment than Global X. But when comparing it to its historical volatility, Amplify CWP Enhanced is 1.1 times less risky than Global X. It trades about 0.22 of its potential returns per unit of risk. Global X Russell is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,592 in Global X Russell on August 25, 2024 and sell it today you would earn a total of 72.00 from holding Global X Russell or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amplify CWP Enhanced vs. Global X Russell
Performance |
| Timeline |
| Amplify CWP Enhanced |
| Global X Russell |
Amplify CWP and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amplify CWP and Global X
The main advantage of trading using opposite Amplify CWP and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify CWP 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 CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP vs. JPMorgan Equity Premium |
| Global X vs. Global X SP | Global X vs. Global X NASDAQ | Global X vs. NEOS ETF Trust | Global X vs. JPMorgan Equity Premium |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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