Correlation Between YieldMax MSTR and ProShares Short

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

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

Diversification Opportunities for YieldMax MSTR and ProShares Short

-0.83

Correlation Coefficient

YieldMax MSTR  ProShares Short

Pay attention - limited upside

The 3 months correlation between YieldMax and ProShares is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax MSTR Option and ProShares Short QQQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short QQQ and YieldMax MSTR 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 MSTR Option are associated (or correlated) with ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short QQQ has no effect on the direction of YieldMax MSTR i.e., YieldMax MSTR and ProShares Short go up and down completely randomly.

Pair Corralation between YieldMax MSTR and ProShares Short

Given the investment horizon of 90 days YieldMax MSTR Option is expected to generate 2.9 times more return on investment than ProShares Short. However, YieldMax MSTR is 2.9 times more volatile than ProShares Short QQQ. It trades about 0.08 of its potential returns per unit of risk. ProShares Short QQQ is currently generating about -0.01 per unit of risk. If you would invest  1,021  in YieldMax MSTR Option on March 23, 2025 and sell it today you would earn a total of  1,043  from holding YieldMax MSTR Option or generate 102.15% return on investment over 90 days.

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

YieldMax MSTR Option  vs.  ProShares Short QQQ

YieldMax MSTR Option

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax MSTR Option are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YieldMax MSTR showed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Short QQQ

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Short QQQ has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with YieldMax MSTR and ProShares Short

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

The idea behind YieldMax MSTR Option and ProShares Short QQQ 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.