Correlation Between Tema ETF and IShares Blockchain

Can any of the company-specific risk be diversified away by investing in both Tema ETF and IShares Blockchain 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 Blockchain 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 Blockchain and, you can compare the effects of market volatilities on Tema ETF and IShares Blockchain 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 Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and IShares Blockchain.

Diversification Opportunities for Tema ETF and IShares Blockchain

-0.34

Correlation Coefficient

Tema ETF  IShares Blockchain

Very good diversification

The 3 months correlation between Tema and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and iShares Blockchain and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Blockchain and 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 Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Blockchain and has no effect on the direction of Tema ETF i.e., Tema ETF and IShares Blockchain go up and down completely randomly.

Pair Corralation between Tema ETF and IShares Blockchain

Considering the 90-day investment horizon Tema ETF Trust is expected to generate 0.21 times more return on investment than IShares Blockchain. However, Tema ETF Trust is 4.69 times less risky than IShares Blockchain. It trades about 0.22 of its potential returns per unit of risk. iShares Blockchain and is currently generating about -0.04 per unit of risk. If you would invest  2,119  in Tema ETF Trust on September 22, 2024 and sell it today you would earn a total of  94.00  from holding Tema ETF Trust or generate 4.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Tema ETF Trust  vs.  iShares Blockchain and

Tema ETF Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tema ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Tema ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

iShares Blockchain and

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Blockchain and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, IShares Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tema ETF and IShares Blockchain

The main advantage of trading using opposite Tema ETF and IShares Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, IShares Blockchain 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 Blockchain will offset losses from the drop in IShares Blockchain's long position.

The idea behind Tema ETF Trust and iShares Blockchain and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.