Correlation Between YieldMax AMZN and WisdomTree Japan

Can any of the company-specific risk be diversified away by investing in both YieldMax AMZN and WisdomTree Japan 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 YieldMax AMZN and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between YieldMax AMZN Option and WisdomTree Japan SmallCap, you can compare the effects of market volatilities on YieldMax AMZN and WisdomTree Japan 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 YieldMax AMZN with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of YieldMax AMZN and WisdomTree Japan.

Diversification Opportunities for YieldMax AMZN and WisdomTree Japan

0.59

Correlation Coefficient

YieldMax AMZN  WisdomTree Japan

Very weak diversification

The 3 months correlation between YieldMax and WisdomTree is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax AMZN Option and WisdomTree Japan SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan SmallCap and YieldMax AMZN 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 YieldMax AMZN Option are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan SmallCap has no effect on the direction of YieldMax AMZN i.e., YieldMax AMZN and WisdomTree Japan go up and down completely randomly.

Pair Corralation between YieldMax AMZN and WisdomTree Japan

Given the investment horizon of 90 days YieldMax AMZN is expected to generate 1.08 times less return on investment than WisdomTree Japan. In addition to that, YieldMax AMZN is 1.74 times more volatile than WisdomTree Japan SmallCap. It trades about 0.13 of its total potential returns per unit of risk. WisdomTree Japan SmallCap is currently generating about 0.23 per unit of volatility. If you would invest  8,202  in WisdomTree Japan SmallCap on May 17, 2025 and sell it today you would earn a total of  972.00  from holding WisdomTree Japan SmallCap or generate 11.85% return on investment over 90 days.

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

YieldMax AMZN Option  vs.  WisdomTree Japan SmallCap

YieldMax AMZN Option

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax AMZN Option are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YieldMax AMZN may actually be approaching a critical reversion point that can send shares even higher in September 2025.

WisdomTree Japan SmallCap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Japan SmallCap are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, WisdomTree Japan may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with YieldMax AMZN and WisdomTree Japan

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

The idea behind YieldMax AMZN Option and WisdomTree Japan SmallCap 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.