Correlation Between YieldMax N and Value Fund

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

Diversification Opportunities for YieldMax N and Value Fund

0.77

Correlation Coefficient

YieldMax N  Value Fund

Poor diversification

The 3 months correlation between YieldMax and Value is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax N Option and Value Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund I 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund I has no effect on the direction of YieldMax N i.e., YieldMax N and Value Fund go up and down completely randomly.

Pair Corralation between YieldMax N and Value Fund

Given the investment horizon of 90 days YieldMax N Option is expected to generate 5.45 times more return on investment than Value Fund. However, YieldMax N is 5.45 times more volatile than Value Fund I. It trades about 0.09 of its potential returns per unit of risk. Value Fund I is currently generating about 0.11 per unit of risk. If you would invest  615.00  in YieldMax N Option on May 12, 2025 and sell it today you would earn a total of  111.00  from holding YieldMax N Option or generate 18.05% return on investment over 90 days.

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

YieldMax N Option  vs.  Value Fund I

YieldMax N Option

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax N Option are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, YieldMax N showed solid returns over the last few months and may actually be approaching a breakup point.

Value Fund I

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Value Fund I are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Value Fund 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 N and Value Fund

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

The idea behind YieldMax N Option and Value Fund I 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.