Correlation Between Cooper Companies, and Tema ETF

Can any of the company-specific risk be diversified away by investing in both Cooper Companies, 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 Cooper Companies, and Tema ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Cooper Companies, and Tema ETF Trust, you can compare the effects of market volatilities on Cooper Companies, 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 Cooper Companies, with a short position of Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Companies, and Tema ETF.

Diversification Opportunities for Cooper Companies, and Tema ETF

0.31

Correlation Coefficient

Cooper Companies,  Tema ETF

Weak diversification

The 3 months correlation between Cooper and Tema is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies, 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 Cooper Companies, 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 The Cooper Companies, 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 Cooper Companies, i.e., Cooper Companies, and Tema ETF go up and down completely randomly.

Pair Corralation between Cooper Companies, and Tema ETF

Considering the 90-day investment horizon The Cooper Companies, is expected to generate 0.82 times more return on investment than Tema ETF. However, The Cooper Companies, is 1.22 times less risky than Tema ETF. It trades about -0.02 of its potential returns per unit of risk. Tema ETF Trust is currently generating about -0.02 per unit of risk. If you would invest  10,606  in The Cooper Companies, on September 3, 2024 and sell it today you would lose (160.00) from holding The Cooper Companies, or give up 1.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Cooper Companies,  vs.  Tema ETF Trust

Cooper Companies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Cooper Companies, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cooper Companies, is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Tema ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tema ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Cooper Companies, and Tema ETF

The main advantage of trading using opposite Cooper Companies, and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Companies, 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.

The idea behind The Cooper Companies, and Tema ETF Trust 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 Transaction History module to view history of all your transactions and understand their impact on performance.