Correlation Between Ab Value and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Ab Value 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 Ab Value and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Timothy Plan Growth, you can compare the effects of market volatilities on Ab Value 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 Ab Value with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Timothy Plan.
Diversification Opportunities for Ab Value and Timothy Plan
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABVCX and Timothy is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Timothy Plan Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Growth and Ab Value 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 Ab Value 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 Growth has no effect on the direction of Ab Value i.e., Ab Value and Timothy Plan go up and down completely randomly.
Pair Corralation between Ab Value and Timothy Plan
Assuming the 90 days horizon Ab Value Fund is expected to generate 1.93 times more return on investment than Timothy Plan. However, Ab Value is 1.93 times more volatile than Timothy Plan Growth. It trades about 0.24 of its potential returns per unit of risk. Timothy Plan Growth is currently generating about 0.14 per unit of risk. If you would invest 1,873 in Ab Value Fund on September 2, 2024 and sell it today you would earn a total of 203.00 from holding Ab Value Fund or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Timothy Plan Growth
Performance |
| Timeline |
| Ab Value Fund |
| Timothy Plan Growth |
Ab Value and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Timothy Plan
The main advantage of trading using opposite Ab Value and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value 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.| Ab Value vs. Ab Global E | Ab Value vs. Ab Global E | Ab Value vs. Ab Global E | Ab Value vs. Ab Minnesota Portfolio |
| Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Plan Growth | Timothy Plan vs. Timothy Plan Strategic |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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