Correlation Between VanEck Oil and Tema ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Oil and Tema 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 VanEck Oil and Tema ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Oil Services and Tema ETF Trust, you can compare the effects of market volatilities on VanEck Oil and Tema 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 VanEck Oil with a short position of Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Oil and Tema ETF.
Diversification Opportunities for VanEck Oil and Tema ETF
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between VanEck and Tema is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Oil Services and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema ETF Trust and VanEck Oil 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 VanEck Oil Services are associated (or correlated) with Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of VanEck Oil i.e., VanEck Oil and Tema ETF go up and down completely randomly.
Pair Corralation between VanEck Oil and Tema ETF
Considering the 90-day investment horizon VanEck Oil Services is expected to generate 1.76 times more return on investment than Tema ETF. However, VanEck Oil is 1.76 times more volatile than Tema ETF Trust. It trades about 0.1 of its potential returns per unit of risk. Tema ETF Trust is currently generating about -0.05 per unit of risk. If you would invest 28,481 in VanEck Oil Services on August 26, 2024 and sell it today you would earn a total of 2,245 from holding VanEck Oil Services or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Oil Services vs. Tema ETF Trust
Performance |
| Timeline |
| VanEck Oil Services |
| Tema ETF Trust |
VanEck Oil and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Oil and Tema ETF
The main advantage of trading using opposite VanEck Oil and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Oil position performs unexpectedly, Tema 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 Tema ETF will offset losses from the drop in Tema ETF's long position.| VanEck Oil vs. EA Series Trust | VanEck Oil vs. EA Series Trust | VanEck Oil vs. Rumble Inc | VanEck Oil vs. EA Series Trust |
| Tema ETF vs. VanEck Pharmaceutical ETF | Tema ETF vs. VanEck Biotech ETF | Tema ETF vs. VanEck Oil Services | Tema ETF vs. iShares Transportation Average |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |