Correlation Between YieldMax N and IShares Trust

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

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

Diversification Opportunities for YieldMax N and IShares Trust

0.43

Correlation Coefficient

YieldMax N  IShares Trust

Very weak diversification

The 3 months correlation between YieldMax and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax N Option and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and YieldMax N 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 N Option are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of YieldMax N i.e., YieldMax N and IShares Trust go up and down completely randomly.

Pair Corralation between YieldMax N and IShares Trust

Given the investment horizon of 90 days YieldMax N Option is expected to under-perform the IShares Trust. In addition to that, YieldMax N is 4.26 times more volatile than iShares Trust. It trades about -0.11 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.01 per unit of volatility. If you would invest  3,141  in iShares Trust on December 29, 2024 and sell it today you would earn a total of  13.00  from holding iShares Trust or generate 0.41% return on investment over 90 days.

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

YieldMax N Option  vs.  iShares Trust

YieldMax N Option

Risk-Adjusted Performance

Very Weak

Over the last 90 days YieldMax N Option has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

iShares Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with YieldMax N and IShares Trust

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

The idea behind YieldMax N Option and iShares Trust 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.