Correlation Between Health Care and Tema Oncology
Can any of the company-specific risk be diversified away by investing in both Health Care and Tema Oncology 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 Health Care and Tema Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Care Select and Tema Oncology ETF, you can compare the effects of market volatilities on Health Care and Tema Oncology 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 Health Care with a short position of Tema Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Care and Tema Oncology.
Diversification Opportunities for Health Care and Tema Oncology
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Health and Tema is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Health Care Select and Tema Oncology ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema Oncology ETF and Health Care 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 Health Care Select are associated (or correlated) with Tema Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema Oncology ETF has no effect on the direction of Health Care i.e., Health Care and Tema Oncology go up and down completely randomly.
Pair Corralation between Health Care and Tema Oncology
Considering the 90-day investment horizon Health Care Select is expected to generate 0.82 times more return on investment than Tema Oncology. However, Health Care Select is 1.22 times less risky than Tema Oncology. It trades about 0.39 of its potential returns per unit of risk. Tema Oncology ETF is currently generating about 0.23 per unit of risk. If you would invest 13,757 in Health Care Select on November 1, 2024 and sell it today you would earn a total of 977.00 from holding Health Care Select or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Health Care Select vs. Tema Oncology ETF
Performance |
| Timeline |
| Health Care Select |
| Tema Oncology ETF |
Health Care and Tema Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Care and Tema Oncology
The main advantage of trading using opposite Health Care and Tema Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Care position performs unexpectedly, Tema Oncology 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 Oncology will offset losses from the drop in Tema Oncology's long position.| Health Care vs. Consumer Staples Select | Health Care vs. Industrial Select Sector | Health Care vs. Consumer Discretionary Select | Health Care vs. Utilities Select Sector |
| Tema Oncology vs. Freedom Day Dividend | Tema Oncology vs. Franklin Templeton ETF | Tema Oncology vs. iShares MSCI China | Tema Oncology vs. Tidal Trust II |
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 CEOs Directory module to screen CEOs from public companies around the world.
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