Correlation Between SPDR SP and YieldMax MSTR

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

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

Diversification Opportunities for SPDR SP and YieldMax MSTR

0.67

Correlation Coefficient

SPDR SP  YieldMax MSTR

Poor diversification

The 3 months correlation between SPDR and YieldMax is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World 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 SPDR SP 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 SPDR SP World 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 SPDR SP i.e., SPDR SP and YieldMax MSTR go up and down completely randomly.

Pair Corralation between SPDR SP and YieldMax MSTR

Given the investment horizon of 90 days SPDR SP is expected to generate 2.28 times less return on investment than YieldMax MSTR. But when comparing it to its historical volatility, SPDR SP World is 3.36 times less risky than YieldMax MSTR. It trades about 0.65 of its potential returns per unit of risk. YieldMax MSTR Option is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  1,928  in YieldMax MSTR Option on February 20, 2025 and sell it today you would earn a total of  431.00  from holding YieldMax MSTR Option or generate 22.35% return on investment over 90 days.

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

SPDR SP World  vs.  YieldMax MSTR Option

SPDR SP World

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP World are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, SPDR SP may actually be approaching a critical reversion point that can send shares even higher in June 2025.

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 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, YieldMax MSTR showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR SP and YieldMax MSTR

The main advantage of trading using opposite SPDR SP and YieldMax MSTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SPDR SP World 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.