Correlation Between IShares Global and Tema ETF
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 IShares Global and Tema ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Financials and Tema ETF Trust, you can compare the effects of market volatilities on IShares Global 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 IShares Global with a short position of Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Tema ETF.
Diversification Opportunities for IShares Global and Tema ETF
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Tema is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Financials 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 IShares Global 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 iShares Global Financials 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 IShares Global i.e., IShares Global and Tema ETF go up and down completely randomly.
Pair Corralation between IShares Global and Tema ETF
Considering the 90-day investment horizon iShares Global Financials is expected to generate 1.1 times more return on investment than Tema ETF. However, IShares Global is 1.1 times more volatile than Tema ETF Trust. It trades about 0.21 of its potential returns per unit of risk. Tema ETF Trust is currently generating about -0.2 per unit of risk. If you would invest 9,571 in iShares Global Financials on August 24, 2024 and sell it today you would earn a total of 426.00 from holding iShares Global Financials or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Financials vs. Tema ETF Trust
Performance |
| Timeline |
| iShares Global Financials |
| Tema ETF Trust |
IShares Global and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Tema ETF
The main advantage of trading using opposite IShares Global and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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.| IShares Global vs. Vanguard Industrials Index | IShares Global vs. Vanguard Consumer Discretionary | IShares Global vs. Vanguard Materials Index | IShares Global vs. Vanguard Health Care |
| Tema ETF vs. iShares Global Industrials | Tema ETF vs. iShares Global Consumer | Tema ETF vs. iShares Global Utilities | Tema ETF vs. iShares Global Financials |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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