Correlation Between Tema ETF and ETF Series
Can any of the company-specific risk be diversified away by investing in both Tema ETF and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Tema ETF and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and ETF Series.
Diversification Opportunities for Tema ETF and ETF Series
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tema and ETF is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Tema ETF i.e., Tema ETF and ETF Series go up and down completely randomly.
Pair Corralation between Tema ETF and ETF Series
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the ETF Series. In addition to that, Tema ETF is 11.63 times more volatile than ETF Series Solutions. It trades about -0.05 of its total potential returns per unit of risk. ETF Series Solutions is currently generating about 0.31 per unit of volatility. If you would invest 2,508 in ETF Series Solutions on August 26, 2024 and sell it today you would earn a total of 34.00 from holding ETF Series Solutions or generate 1.36% 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. ETF Series Solutions
Performance |
| Timeline |
| Tema ETF Trust |
| ETF Series Solutions |
Tema ETF and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and ETF Series
The main advantage of trading using opposite Tema ETF and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Tema ETF vs. VanEck Pharmaceutical ETF | Tema ETF vs. VanEck Biotech ETF | Tema ETF vs. VanEck Oil Services | Tema ETF vs. iShares Transportation Average |
| ETF Series vs. Capital Group Short | ETF Series vs. Capital Group Municipal | ETF Series vs. Capital Group Global | ETF Series vs. Capital Group Dividend |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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