Correlation Between YieldMax Ultra and Automatic Data

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

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

Diversification Opportunities for YieldMax Ultra and Automatic Data

-0.57

Correlation Coefficient

YieldMax Ultra  Automatic Data

Excellent diversification

The 3 months correlation between YieldMax and Automatic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax Ultra Option and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and YieldMax Ultra 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 Ultra Option are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of YieldMax Ultra i.e., YieldMax Ultra and Automatic Data go up and down completely randomly.

Pair Corralation between YieldMax Ultra and Automatic Data

Given the investment horizon of 90 days YieldMax Ultra Option is expected to generate 0.93 times more return on investment than Automatic Data. However, YieldMax Ultra Option is 1.07 times less risky than Automatic Data. It trades about 0.11 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.08 per unit of risk. If you would invest  513.00  in YieldMax Ultra Option on July 5, 2025 and sell it today you would earn a total of  34.50  from holding YieldMax Ultra Option or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

YieldMax Ultra Option  vs.  Automatic Data Processing

YieldMax Ultra Option

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax Ultra Option are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, YieldMax Ultra may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Automatic Data Processing

Risk-Adjusted Performance

Weakest

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Automatic Data is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with YieldMax Ultra and Automatic Data

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

The idea behind YieldMax Ultra Option and Automatic Data Processing 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.