Correlation Between Global X and Amplify CWP
Can any of the company-specific risk be diversified away by investing in both Global X and Amplify CWP 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 CWP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SP and Amplify CWP Enhanced, you can compare the effects of market volatilities on Global X and Amplify CWP 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 CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Amplify CWP.
Diversification Opportunities for Global X and Amplify CWP
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Amplify is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X SP and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced 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 SP are associated (or correlated) with Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of Global X i.e., Global X and Amplify CWP go up and down completely randomly.
Pair Corralation between Global X and Amplify CWP
Given the investment horizon of 90 days Global X is expected to generate 1.65 times less return on investment than Amplify CWP. But when comparing it to its historical volatility, Global X SP is 1.09 times less risky than Amplify CWP. It trades about 0.19 of its potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,087 in Amplify CWP Enhanced on August 28, 2024 and sell it today you would earn a total of 183.00 from holding Amplify CWP Enhanced or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SP vs. Amplify CWP Enhanced
Performance |
| Timeline |
| Global X SP |
| Amplify CWP Enhanced |
Global X and Amplify CWP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Amplify CWP
The main advantage of trading using opposite Global X and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Amplify CWP 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 CWP will offset losses from the drop in Amplify CWP's long position.The idea behind Global X SP and Amplify CWP Enhanced 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 CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |