Correlation Between IShares Trust and YieldMax BABA

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

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

Diversification Opportunities for IShares Trust and YieldMax BABA

-0.44

Correlation Coefficient

IShares Trust  YieldMax BABA

Very good diversification

The 3 months correlation between IShares and YieldMax is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and YieldMax BABA Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax BABA Option and IShares Trust 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 iShares Trust are associated (or correlated) with YieldMax BABA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax BABA Option has no effect on the direction of IShares Trust i.e., IShares Trust and YieldMax BABA go up and down completely randomly.

Pair Corralation between IShares Trust and YieldMax BABA

Given the investment horizon of 90 days iShares Trust is expected to generate 0.14 times more return on investment than YieldMax BABA. However, iShares Trust is 7.07 times less risky than YieldMax BABA. It trades about 0.12 of its potential returns per unit of risk. YieldMax BABA Option is currently generating about -0.02 per unit of risk. If you would invest  4,268  in iShares Trust on May 4, 2025 and sell it today you would earn a total of  84.00  from holding iShares Trust or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

iShares Trust   vs.  YieldMax BABA Option

iShares Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

YieldMax BABA Option

Risk-Adjusted Performance

Very Weak

Over the last 90 days YieldMax BABA Option has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, YieldMax BABA is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IShares Trust and YieldMax BABA

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

The idea behind iShares Trust and YieldMax BABA Option 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.

Check out your portfolio center.

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.