Correlation Between Amplify ETF and SPDR Galaxy

Can any of the company-specific risk be diversified away by investing in both Amplify ETF 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 ETF 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 ETF Trust and SPDR Galaxy Hedged, you can compare the effects of market volatilities on Amplify ETF 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 ETF with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplify ETF and SPDR Galaxy.

Diversification Opportunities for Amplify ETF and SPDR Galaxy

-0.71

Correlation Coefficient

Amplify ETF  SPDR Galaxy

Pay attention - limited upside

The 3 months correlation between Amplify and SPDR is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amplify ETF Trust 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 ETF 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 ETF Trust 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 ETF i.e., Amplify ETF and SPDR Galaxy go up and down completely randomly.

Pair Corralation between Amplify ETF and SPDR Galaxy

Allowing for the 90-day total investment horizon Amplify ETF Trust is expected to under-perform the SPDR Galaxy. In addition to that, Amplify ETF is 1.18 times more volatile than SPDR Galaxy Hedged. It trades about -0.07 of its total potential returns per unit of risk. SPDR Galaxy Hedged is currently generating about 0.25 per unit of volatility. If you would invest  2,525  in SPDR Galaxy Hedged on August 30, 2024 and sell it today you would earn a total of  1,210  from holding SPDR Galaxy Hedged or generate 47.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Amplify ETF Trust  vs.  SPDR Galaxy Hedged

Amplify ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Etf's forward-looking indicators remain relatively steady which may send shares a bit higher in December 2024. The new chaos may also be a sign of medium-term up-swing for the ETF firm stakeholders.

SPDR Galaxy Hedged

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Galaxy Hedged are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, SPDR Galaxy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplify ETF and SPDR Galaxy

The main advantage of trading using opposite Amplify ETF and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplify ETF 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.

The idea behind Amplify ETF Trust and SPDR Galaxy Hedged 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.

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.