Correlation Between Tether and YFII

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

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

Diversification Opportunities for Tether and YFII

0.0

Correlation Coefficient

Tether  YFII

Pay attention - limited upside

The 3 months correlation between Tether and YFII is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and YFII in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YFII and Tether 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 Tether are associated (or correlated) with YFII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YFII has no effect on the direction of Tether i.e., Tether and YFII go up and down completely randomly.

Pair Corralation between Tether and YFII

If you would invest  100.00  in Tether on April 20, 2025 and sell it today you would earn a total of  0.00  from holding Tether or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tether  vs.  YFII

Tether

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Tether is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

YFII

Risk-Adjusted Performance

Very Weak

Over the last 90 days YFII has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for YFII shareholders.

Pair Trading with Tether and YFII

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

The idea behind Tether and YFII 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.