Correlation Between Tema ETF and SHP ETF
Can any of the company-specific risk be diversified away by investing in both Tema ETF and SHP 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 Tema ETF and SHP ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tema ETF Trust and SHP ETF Trust, you can compare the effects of market volatilities on Tema ETF and SHP 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 Tema ETF with a short position of SHP ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and SHP ETF.
Diversification Opportunities for Tema ETF and SHP ETF
Very good diversification
The 3 months correlation between Tema and SHP is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and SHP ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHP ETF Trust and Tema 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 Tema ETF Trust are associated (or correlated) with SHP ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHP ETF Trust has no effect on the direction of Tema ETF i.e., Tema ETF and SHP ETF go up and down completely randomly.
Pair Corralation between Tema ETF and SHP ETF
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the SHP ETF. In addition to that, Tema ETF is 29.39 times more volatile than SHP ETF Trust. It trades about -0.17 of its total potential returns per unit of risk. SHP ETF Trust is currently generating about 0.85 per unit of volatility. If you would invest 4,956 in SHP ETF Trust on August 29, 2024 and sell it today you would earn a total of 29.00 from holding SHP ETF Trust or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tema ETF Trust vs. SHP ETF Trust
Performance |
| Timeline |
| Tema ETF Trust |
| SHP ETF Trust |
Tema ETF and SHP ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and SHP ETF
The main advantage of trading using opposite Tema ETF and SHP ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, SHP 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 SHP ETF will offset losses from the drop in SHP ETF's long position.| Tema ETF vs. Smith Nephew SNATS | Tema ETF vs. Fresenius Medical Care | Tema ETF vs. Fomento Economico Mexicano | Tema ETF vs. The Cooper Companies, |
| SHP ETF vs. SHP ETF Trust | SHP ETF vs. SHP ETF Trust | SHP ETF vs. iShares Trust | SHP ETF vs. VanEck ETF Trust |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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