Correlation Between IShares Consumer and Tema ETF
Can any of the company-specific risk be diversified away by investing in both IShares Consumer 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 Consumer 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 Consumer Discretionary and Tema ETF Trust, you can compare the effects of market volatilities on IShares Consumer 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 Consumer with a short position of Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Consumer and Tema ETF.
Diversification Opportunities for IShares Consumer and Tema ETF
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Tema is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Discretionary 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 Consumer 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 Consumer Discretionary 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 Consumer i.e., IShares Consumer and Tema ETF go up and down completely randomly.
Pair Corralation between IShares Consumer and Tema ETF
Considering the 90-day investment horizon iShares Consumer Discretionary is expected to generate 1.09 times more return on investment than Tema ETF. However, IShares Consumer is 1.09 times more volatile than Tema ETF Trust. It trades about 0.35 of its potential returns per unit of risk. Tema ETF Trust is currently generating about -0.23 per unit of risk. If you would invest 8,770 in iShares Consumer Discretionary on August 23, 2024 and sell it today you would earn a total of 698.00 from holding iShares Consumer Discretionary or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Consumer Discretionary vs. Tema ETF Trust
Performance |
| Timeline |
| iShares Consumer Dis |
| Tema ETF Trust |
IShares Consumer and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Consumer and Tema ETF
The main advantage of trading using opposite IShares Consumer and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Consumer 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 Consumer vs. iShares Consumer Staples | IShares Consumer vs. iShares Industrials ETF | IShares Consumer vs. iShares Basic Materials | IShares Consumer vs. iShares Utilities ETF |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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