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 SP and Timothy Plan LargeMid, 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
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Timothy is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Timothy Plan LargeMid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan LargeMid 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 SP 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 LargeMid 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
Considering the 90-day investment horizon iShares Core SP is expected to generate 1.0 times more return on investment than Timothy Plan. However, IShares Core is 1.0 times more volatile than Timothy Plan LargeMid. It trades about 0.14 of its potential returns per unit of risk. Timothy Plan LargeMid is currently generating about 0.11 per unit of risk. If you would invest 40,394 in iShares Core SP on August 31, 2024 and sell it today you would earn a total of 19,788 from holding iShares Core SP or generate 48.99% 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 SP vs. Timothy Plan LargeMid
Performance |
| Timeline |
| iShares Core SP |
| Timothy Plan LargeMid |
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 SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| Timothy Plan vs. iShares Small Cap | Timothy Plan vs. Invesco ESG NASDAQ | Timothy Plan vs. Invesco ESG NASDAQ | Timothy Plan vs. BlackRock Carbon Transition |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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