Correlation Between Harbor ETF and Tema ETF
Can any of the company-specific risk be diversified away by investing in both Harbor ETF and Tema ETF 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 Harbor ETF and Tema ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor ETF Trust and Tema ETF Trust, you can compare the effects of market volatilities on Harbor ETF and Tema ETF 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 Harbor ETF with a short position of Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor ETF and Tema ETF.
Diversification Opportunities for Harbor ETF and Tema ETF
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harbor and Tema is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Harbor ETF Trust and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema ETF Trust and Harbor ETF 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 Harbor ETF Trust are associated (or correlated) with Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of Harbor ETF i.e., Harbor ETF and Tema ETF go up and down completely randomly.
Pair Corralation between Harbor ETF and Tema ETF
Given the investment horizon of 90 days Harbor ETF is expected to generate 4.49 times less return on investment than Tema ETF. But when comparing it to its historical volatility, Harbor ETF Trust is 1.27 times less risky than Tema ETF. It trades about 0.07 of its potential returns per unit of risk. Tema ETF Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,222 in Tema ETF Trust on September 12, 2024 and sell it today you would earn a total of 93.90 from holding Tema ETF Trust or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harbor ETF Trust vs. Tema ETF Trust
Performance |
| Timeline |
| Harbor ETF Trust |
| Tema ETF Trust |
Harbor ETF and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor ETF and Tema ETF
The main advantage of trading using opposite Harbor ETF and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor ETF position performs unexpectedly, Tema ETF 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 Tema ETF will offset losses from the drop in Tema ETF's long position.| Harbor ETF vs. FT Vest Equity | Harbor ETF vs. Northern Lights | Harbor ETF vs. Dimensional International High | Harbor ETF vs. JPMorgan Fundamental Data |
| Tema ETF vs. Invesco Dynamic Building | Tema ETF vs. SCOR PK | Tema ETF vs. Morningstar Unconstrained Allocation | Tema ETF vs. Thrivent High Yield |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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