Correlation Between Global X and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Global X and Amplify ETF 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 Global X and Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and Amplify ETF Trust, you can compare the effects of market volatilities on Global X and Amplify ETF 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 Global X with a short position of Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Amplify ETF.
Diversification Opportunities for Global X and Amplify ETF
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Amplify is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust and Global X 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 Global X Thematic are associated (or correlated) with Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Global X i.e., Global X and Amplify ETF go up and down completely randomly.
Pair Corralation between Global X and Amplify ETF
Given the investment horizon of 90 days Global X Thematic is expected to generate 1.16 times more return on investment than Amplify ETF. However, Global X is 1.16 times more volatile than Amplify ETF Trust. It trades about 0.11 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.03 per unit of risk. If you would invest 2,357 in Global X Thematic on October 20, 2024 and sell it today you would earn a total of 51.00 from holding Global X Thematic or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Thematic vs. Amplify ETF Trust
Performance |
| Timeline |
| Global X Thematic |
| Amplify ETF Trust |
Global X and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Amplify ETF
The main advantage of trading using opposite Global X and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Amplify ETF 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 Amplify ETF will offset losses from the drop in Amplify ETF's long position.The idea behind Global X Thematic and Amplify ETF Trust 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.| Amplify ETF vs. VanEck Video Gaming | Amplify ETF vs. Roundhill Video Games | Amplify ETF vs. Global X Social | Amplify ETF vs. Amplify ETF Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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