Correlation Between YieldMax AMZN and Federated Gov

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

Diversification Opportunities for YieldMax AMZN and Federated Gov

0.2

Correlation Coefficient

YieldMax AMZN  Federated Gov

Modest diversification

The 3 months correlation between YieldMax and Federated is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax AMZN Option and Federated Gov Sec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Gov Sec 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 Federated Gov. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Gov Sec has no effect on the direction of YieldMax AMZN i.e., YieldMax AMZN and Federated Gov go up and down completely randomly.

Pair Corralation between YieldMax AMZN and Federated Gov

Given the investment horizon of 90 days YieldMax AMZN Option is expected to generate 11.6 times more return on investment than Federated Gov. However, YieldMax AMZN is 11.6 times more volatile than Federated Gov Sec. It trades about 0.01 of its potential returns per unit of risk. Federated Gov Sec is currently generating about 0.08 per unit of risk. If you would invest  1,422  in YieldMax AMZN Option on July 1, 2025 and sell it today you would earn a total of  1.00  from holding YieldMax AMZN Option or generate 0.07% return on investment over 90 days.

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

YieldMax AMZN Option  vs.  Federated Gov Sec

YieldMax AMZN Option

Risk-Adjusted Performance

Weakest

Over the last 90 days YieldMax AMZN Option has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, YieldMax AMZN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Federated Gov Sec

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Gov Sec are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Federated Gov is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with YieldMax AMZN and Federated Gov

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

The idea behind YieldMax AMZN Option and Federated Gov Sec 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.