Correlation Between Global X and YieldMax AMZN

Can any of the company-specific risk be diversified away by investing in both Global X and YieldMax AMZN 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 YieldMax AMZN 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 YieldMax AMZN Option, you can compare the effects of market volatilities on Global X and YieldMax AMZN 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 YieldMax AMZN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and YieldMax AMZN.

Diversification Opportunities for Global X and YieldMax AMZN

0.87

Correlation Coefficient

Global X  YieldMax AMZN

Very poor diversification

The 3 months correlation between Global and YieldMax is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global X SP and YieldMax AMZN Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax AMZN Option 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 YieldMax AMZN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax AMZN Option has no effect on the direction of Global X i.e., Global X and YieldMax AMZN go up and down completely randomly.

Pair Corralation between Global X and YieldMax AMZN

Given the investment horizon of 90 days Global X is expected to generate 2.32 times less return on investment than YieldMax AMZN. But when comparing it to its historical volatility, Global X SP is 3.82 times less risky than YieldMax AMZN. It trades about 0.22 of its potential returns per unit of risk. YieldMax AMZN Option is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,695  in YieldMax AMZN Option on September 2, 2024 and sell it today you would earn a total of  219.00  from holding YieldMax AMZN Option or generate 12.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Global X SP  vs.  YieldMax AMZN Option

Global X SP

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SP are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Global X is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

YieldMax AMZN Option

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax AMZN Option are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, YieldMax AMZN showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and YieldMax AMZN

The main advantage of trading using opposite Global X and YieldMax AMZN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, YieldMax AMZN 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 YieldMax AMZN will offset losses from the drop in YieldMax AMZN's long position.

The idea behind Global X SP and YieldMax AMZN Option 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.