Correlation Between First American and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both First American 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 First American and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Funds and Timothy Plan High, you can compare the effects of market volatilities on First American 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 First American with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Timothy Plan.
Diversification Opportunities for First American and Timothy Plan
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and Timothy is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding First American Funds and Timothy Plan High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan High and First American 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 First American Funds 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 High has no effect on the direction of First American i.e., First American and Timothy Plan go up and down completely randomly.
Pair Corralation between First American and Timothy Plan
Assuming the 90 days horizon First American is expected to generate 2.59 times less return on investment than Timothy Plan. In addition to that, First American is 1.0 times more volatile than Timothy Plan High. It trades about 0.13 of its total potential returns per unit of risk. Timothy Plan High is currently generating about 0.33 per unit of volatility. If you would invest 863.00 in Timothy Plan High on September 5, 2024 and sell it today you would earn a total of 47.00 from holding Timothy Plan High or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
First American Funds vs. Timothy Plan High
Performance |
| Timeline |
| First American Funds |
| Timothy Plan High |
First American and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Timothy Plan
The main advantage of trading using opposite First American and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American 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.| First American vs. Iaadx | First American vs. Ab Value Fund | First American vs. T Rowe Price | First American vs. Balanced Fund Investor |
| Timothy Plan vs. First American Funds | Timothy Plan vs. Hsbc Treasury Money | Timothy Plan vs. Prudential Government Money | Timothy Plan vs. Wilmington Funds |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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