Correlation Between Global X and Amplify High
Can any of the company-specific risk be diversified away by investing in both Global X and Amplify High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X NASDAQ and Amplify High Income, you can compare the effects of market volatilities on Global X and Amplify High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Amplify High.
Diversification Opportunities for Global X and Amplify High
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Amplify is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global X NASDAQ and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High Income 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 NASDAQ are associated (or correlated) with Amplify High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of Global X i.e., Global X and Amplify High go up and down completely randomly.
Pair Corralation between Global X and Amplify High
Given the investment horizon of 90 days Global X NASDAQ is expected to generate 1.61 times more return on investment than Amplify High. However, Global X is 1.61 times more volatile than Amplify High Income. It trades about 0.1 of its potential returns per unit of risk. Amplify High Income is currently generating about 0.13 per unit of risk. If you would invest 1,652 in Global X NASDAQ on September 1, 2024 and sell it today you would earn a total of 170.00 from holding Global X NASDAQ or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X NASDAQ vs. Amplify High Income
Performance |
| Timeline |
| Global X NASDAQ |
| Amplify High Income |
Global X and Amplify High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Amplify High
The main advantage of trading using opposite Global X and Amplify High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Amplify High 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 High will offset losses from the drop in Amplify High's long position.The idea behind Global X NASDAQ and Amplify High Income 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 High vs. Invesco KBW High | Amplify High vs. Invesco CEF Income | Amplify High vs. Global X SuperDividend | Amplify High vs. Arrow 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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