Correlation Between IShares Core and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Timothy Plan International, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Timothy Plan.
Diversification Opportunities for IShares Core and Timothy Plan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Timothy is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Timothy Plan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Interna and IShares Core 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 iShares Core MSCI 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 Interna has no effect on the direction of IShares Core i.e., IShares Core and Timothy Plan go up and down completely randomly.
Pair Corralation between IShares Core and Timothy Plan
Given the investment horizon of 90 days iShares Core MSCI is expected to generate 1.08 times more return on investment than Timothy Plan. However, IShares Core is 1.08 times more volatile than Timothy Plan International. It trades about 0.39 of its potential returns per unit of risk. Timothy Plan International is currently generating about 0.38 per unit of risk. If you would invest 7,136 in iShares Core MSCI on November 18, 2024 and sell it today you would earn a total of 464.00 from holding iShares Core MSCI or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Timothy Plan International
Performance |
| Timeline |
| iShares Core MSCI |
| Timothy Plan Interna |
IShares Core and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Timothy Plan
The main advantage of trading using opposite IShares Core and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core MSCI | IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP |
| Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan Small | 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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