Correlation Between Schwab Fundamental and YieldMax MSTR

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

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

Diversification Opportunities for Schwab Fundamental and YieldMax MSTR

0.65

Correlation Coefficient

Schwab Fundamental  YieldMax MSTR

Poor diversification

The 3 months correlation between Schwab and YieldMax is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Fundamental Small and YieldMax MSTR Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax MSTR Option and Schwab Fundamental 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 Schwab Fundamental Small are associated (or correlated) with YieldMax MSTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax MSTR Option has no effect on the direction of Schwab Fundamental i.e., Schwab Fundamental and YieldMax MSTR go up and down completely randomly.

Pair Corralation between Schwab Fundamental and YieldMax MSTR

Given the investment horizon of 90 days Schwab Fundamental Small is expected to generate 0.45 times more return on investment than YieldMax MSTR. However, Schwab Fundamental Small is 2.23 times less risky than YieldMax MSTR. It trades about 0.11 of its potential returns per unit of risk. YieldMax MSTR Option is currently generating about -0.01 per unit of risk. If you would invest  2,681  in Schwab Fundamental Small on May 5, 2025 and sell it today you would earn a total of  194.00  from holding Schwab Fundamental Small or generate 7.24% return on investment over 90 days.

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

Schwab Fundamental Small  vs.  YieldMax MSTR Option

Schwab Fundamental Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Fundamental Small are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Schwab Fundamental may actually be approaching a critical reversion point that can send shares even higher in September 2025.

YieldMax MSTR Option

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Schwab Fundamental and YieldMax MSTR

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

The idea behind Schwab Fundamental Small and YieldMax MSTR 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.

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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.