Correlation Between YieldMax N and GraniteShares

Can any of the company-specific risk be diversified away by investing in both YieldMax N and GraniteShares 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 GraniteShares 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 GraniteShares 2x Long, you can compare the effects of market volatilities on YieldMax N and GraniteShares 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 GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of YieldMax N and GraniteShares.

Diversification Opportunities for YieldMax N and GraniteShares

0.48

Correlation Coefficient

YieldMax N  GraniteShares

Very weak diversification

The 3 months correlation between YieldMax and GraniteShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax N Option and GraniteShares 2x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 2x Long 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 GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 2x Long has no effect on the direction of YieldMax N i.e., YieldMax N and GraniteShares go up and down completely randomly.

Pair Corralation between YieldMax N and GraniteShares

Given the investment horizon of 90 days YieldMax N Option is expected to generate 2.0 times more return on investment than GraniteShares. However, YieldMax N is 2.0 times more volatile than GraniteShares 2x Long. It trades about 0.09 of its potential returns per unit of risk. GraniteShares 2x Long is currently generating about 0.01 per unit of risk. If you would invest  1,004  in YieldMax N Option on October 12, 2024 and sell it today you would earn a total of  240.00  from holding YieldMax N Option or generate 23.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

YieldMax N Option  vs.  GraniteShares 2x Long

YieldMax N Option

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YieldMax N Option are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, YieldMax N showed solid returns over the last few months and may actually be approaching a breakup point.

GraniteShares 2x Long

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GraniteShares 2x Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, GraniteShares is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with YieldMax N and GraniteShares

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

The idea behind YieldMax N Option and GraniteShares 2x Long 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.