Correlation Between YieldMax N and Select Fund

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

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

Diversification Opportunities for YieldMax N and Select Fund

0.9

Correlation Coefficient

YieldMax N  Select Fund

Almost no diversification

The 3 months correlation between YieldMax and Select is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax N Option and Select Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund C and YieldMax N 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 N Option are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund C has no effect on the direction of YieldMax N i.e., YieldMax N and Select Fund go up and down completely randomly.

Pair Corralation between YieldMax N and Select Fund

Given the investment horizon of 90 days YieldMax N Option is expected to generate 3.38 times more return on investment than Select Fund. However, YieldMax N is 3.38 times more volatile than Select Fund C. It trades about 0.21 of its potential returns per unit of risk. Select Fund C is currently generating about 0.27 per unit of risk. If you would invest  593.00  in YieldMax N Option on May 1, 2025 and sell it today you would earn a total of  276.00  from holding YieldMax N Option or generate 46.54% return on investment over 90 days.

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

YieldMax N Option  vs.  Select Fund C

YieldMax N Option

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax N Option are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YieldMax N showed solid returns over the last few months and may actually be approaching a breakup point.

Select Fund C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Select Fund C are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Select Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YieldMax N and Select Fund

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

The idea behind YieldMax N Option and Select Fund C 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.