Correlation Between YieldMax and First Trust
Can any of the company-specific risk be diversified away by investing in both YieldMax and First 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 and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YieldMax SP 500 and First Trust Exchange Traded, you can compare the effects of market volatilities on YieldMax and First 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 with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of YieldMax and First Trust.
Diversification Opportunities for YieldMax and First Trust
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between YieldMax and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax SP 500 and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and YieldMax 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 SP 500 are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of YieldMax i.e., YieldMax and First Trust go up and down completely randomly.
Pair Corralation between YieldMax and First Trust
Given the investment horizon of 90 days YieldMax SP 500 is expected to generate 0.9 times more return on investment than First Trust. However, YieldMax SP 500 is 1.11 times less risky than First Trust. It trades about 0.08 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.03 per unit of risk. If you would invest 4,278 in YieldMax SP 500 on August 24, 2025 and sell it today you would earn a total of 143.00 from holding YieldMax SP 500 or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
YieldMax SP 500 vs. First Trust Exchange Traded
Performance |
| Timeline |
| YieldMax SP 500 |
| First Trust Exchange |
YieldMax and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YieldMax and First Trust
The main advantage of trading using opposite YieldMax and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YieldMax position performs unexpectedly, First 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 First Trust will offset losses from the drop in First Trust's long position.| YieldMax vs. YieldMax Nasdaq 100 | YieldMax vs. Pacer Funds Trust | YieldMax vs. TrueShares Structured Outcome | YieldMax vs. TrueShares Structured Outcome |
| First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Emerging | First Trust vs. iShares Trust | First Trust vs. Northern Lights |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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