Correlation Between Tema ETF and FlexShares Ready
Can any of the company-specific risk be diversified away by investing in both Tema ETF and FlexShares Ready 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 FlexShares Ready 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 FlexShares Ready Access, you can compare the effects of market volatilities on Tema ETF and FlexShares Ready 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 FlexShares Ready. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and FlexShares Ready.
Diversification Opportunities for Tema ETF and FlexShares Ready
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tema and FlexShares is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and FlexShares Ready Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Ready Access 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 FlexShares Ready. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Ready Access has no effect on the direction of Tema ETF i.e., Tema ETF and FlexShares Ready go up and down completely randomly.
Pair Corralation between Tema ETF and FlexShares Ready
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the FlexShares Ready. In addition to that, Tema ETF is 42.63 times more volatile than FlexShares Ready Access. It trades about -0.17 of its total potential returns per unit of risk. FlexShares Ready Access is currently generating about 0.85 per unit of volatility. If you would invest 7,519 in FlexShares Ready Access on August 28, 2024 and sell it today you would earn a total of 29.00 from holding FlexShares Ready Access or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tema ETF Trust vs. FlexShares Ready Access
Performance |
| Timeline |
| Tema ETF Trust |
| FlexShares Ready Access |
Tema ETF and FlexShares Ready Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and FlexShares Ready
The main advantage of trading using opposite Tema ETF and FlexShares Ready positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, FlexShares Ready 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 FlexShares Ready will offset losses from the drop in FlexShares Ready'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, |
| FlexShares Ready vs. SPDR SSgA Ultra | FlexShares Ready vs. FlexShares iBoxx 3 Year | FlexShares Ready vs. FlexShares iBoxx 5 Year | FlexShares Ready vs. PIMCO Enhanced Low |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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