Correlation Between Tema ETF and Main International
Can any of the company-specific risk be diversified away by investing in both Tema ETF and Main International 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 Main International 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 Main International ETF, you can compare the effects of market volatilities on Tema ETF and Main International 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 Main International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and Main International.
Diversification Opportunities for Tema ETF and Main International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tema and Main is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and Main International ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main International ETF 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 Main International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main International ETF has no effect on the direction of Tema ETF i.e., Tema ETF and Main International go up and down completely randomly.
Pair Corralation between Tema ETF and Main International
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the Main International. In addition to that, Tema ETF is 1.15 times more volatile than Main International ETF. It trades about -0.01 of its total potential returns per unit of risk. Main International ETF is currently generating about 0.04 per unit of volatility. If you would invest 1,979 in Main International ETF on October 25, 2024 and sell it today you would earn a total of 299.00 from holding Main International ETF or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.61% |
| Values | Daily Returns |
Tema ETF Trust vs. Main International ETF
Performance |
| Timeline |
| Tema ETF Trust |
| Main International ETF |
Tema ETF and Main International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and Main International
The main advantage of trading using opposite Tema ETF and Main International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, Main International 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 Main International will offset losses from the drop in Main International'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, |
| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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