Correlation Between RiverFront Dynamic and Tema Oncology

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

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

Diversification Opportunities for RiverFront Dynamic and Tema Oncology

0.39

Correlation Coefficient

RiverFront Dynamic  Tema Oncology

Weak diversification

The 3 months correlation between RiverFront and Tema is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RiverFront Dynamic Dividend 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 RiverFront Dynamic 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 RiverFront Dynamic Dividend 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 RiverFront Dynamic i.e., RiverFront Dynamic and Tema Oncology go up and down completely randomly.

Pair Corralation between RiverFront Dynamic and Tema Oncology

Given the investment horizon of 90 days RiverFront Dynamic is expected to generate 8.07 times less return on investment than Tema Oncology. But when comparing it to its historical volatility, RiverFront Dynamic Dividend is 1.81 times less risky than Tema Oncology. It trades about 0.07 of its potential returns per unit of risk. Tema Oncology ETF is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2,718  in Tema Oncology ETF on September 15, 2025 and sell it today you would earn a total of  745.00  from holding Tema Oncology ETF or generate 27.41% return on investment over 90 days.

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

RiverFront Dynamic Dividend  vs.  Tema Oncology ETF

RiverFront Dynamic

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in RiverFront Dynamic Dividend are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, RiverFront Dynamic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tema Oncology ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tema Oncology ETF are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Tema Oncology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RiverFront Dynamic and Tema Oncology

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

The idea behind RiverFront Dynamic Dividend and Tema Oncology ETF 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.