Correlation Between High-yield Municipal and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both High-yield Municipal and Timothy Plan 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 High-yield Municipal and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Municipal Fund and Timothy Plan Small, you can compare the effects of market volatilities on High-yield Municipal and Timothy Plan 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 High-yield Municipal with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of High-yield Municipal and Timothy Plan.
Diversification Opportunities for High-yield Municipal and Timothy Plan
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between High-yield and Timothy is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Municipal Fund and Timothy Plan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Small and High-yield Municipal 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 High Yield Municipal Fund are associated (or correlated) with Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan Small has no effect on the direction of High-yield Municipal i.e., High-yield Municipal and Timothy Plan go up and down completely randomly.
Pair Corralation between High-yield Municipal and Timothy Plan
Assuming the 90 days horizon High-yield Municipal is expected to generate 6.88 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, High Yield Municipal Fund is 4.29 times less risky than Timothy Plan. It trades about 0.16 of its potential returns per unit of risk. Timothy Plan Small is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,871 in Timothy Plan Small on August 30, 2024 and sell it today you would earn a total of 367.00 from holding Timothy Plan Small or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Municipal Fund vs. Timothy Plan Small
Performance |
| Timeline |
| High Yield Municipal |
| Timothy Plan Small |
High-yield Municipal and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High-yield Municipal and Timothy Plan
The main advantage of trading using opposite High-yield Municipal and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High-yield Municipal position performs unexpectedly, Timothy Plan 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 Timothy Plan will offset losses from the drop in Timothy Plan's long position.| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
| Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan International | Timothy Plan vs. Timothy Plan |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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