Correlation Between YieldMax AMZN and First Trust

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

Diversification Opportunities for YieldMax AMZN and First Trust

0.95

Correlation Coefficient

YieldMax AMZN  First Trust

Almost no diversification

The 3 months correlation between YieldMax and First is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax AMZN Option and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Short has no effect on the direction of YieldMax AMZN i.e., YieldMax AMZN and First Trust go up and down completely randomly.

Pair Corralation between YieldMax AMZN and First Trust

Given the investment horizon of 90 days YieldMax AMZN Option is expected to generate 12.52 times more return on investment than First Trust. However, YieldMax AMZN is 12.52 times more volatile than First Trust Short. It trades about 0.28 of its potential returns per unit of risk. First Trust Short is currently generating about 0.27 per unit of risk. If you would invest  1,368  in YieldMax AMZN Option on May 1, 2025 and sell it today you would earn a total of  283.00  from holding YieldMax AMZN Option or generate 20.69% return on investment over 90 days.

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

YieldMax AMZN Option  vs.  First Trust Short

YieldMax AMZN Option

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax AMZN Option are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YieldMax AMZN showed solid returns over the last few months and may actually be approaching a breakup point.

First Trust Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Short are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, First Trust 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 First Trust

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

The idea behind YieldMax AMZN Option and First Trust Short 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.