Correlation Between Tema ETF and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both Tema ETF and IShares Treasury 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 IShares Treasury 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 iShares Treasury Floating, you can compare the effects of market volatilities on Tema ETF and IShares Treasury 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 IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and IShares Treasury.
Diversification Opportunities for Tema ETF and IShares Treasury
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tema and IShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and iShares Treasury Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Floating 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 IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Floating has no effect on the direction of Tema ETF i.e., Tema ETF and IShares Treasury go up and down completely randomly.
Pair Corralation between Tema ETF and IShares Treasury
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the IShares Treasury. In addition to that, Tema ETF is 52.94 times more volatile than iShares Treasury Floating. It trades about -0.24 of its total potential returns per unit of risk. iShares Treasury Floating is currently generating about 1.22 per unit of volatility. If you would invest 5,038 in iShares Treasury Floating on August 25, 2024 and sell it today you would earn a total of 22.00 from holding iShares Treasury Floating or generate 0.44% 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. iShares Treasury Floating
Performance |
| Timeline |
| Tema ETF Trust |
| iShares Treasury Floating |
Tema ETF and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and IShares Treasury
The main advantage of trading using opposite Tema ETF and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, IShares Treasury 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 IShares Treasury will offset losses from the drop in IShares Treasury'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, |
| IShares Treasury vs. First Trust Low | IShares Treasury vs. First Trust Senior | IShares Treasury vs. First Trust TCW | IShares Treasury vs. First Trust Tactical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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