Correlation Between NYSE Composite and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Timothy Plan Large, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Timothy Plan.
Diversification Opportunities for NYSE Composite and Timothy Plan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Timothy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Timothy Plan Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Large and NYSE Composite 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 NYSE Composite 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 Large has no effect on the direction of NYSE Composite i.e., NYSE Composite and Timothy Plan go up and down completely randomly.
Pair Corralation between NYSE Composite and Timothy Plan
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.4 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, NYSE Composite is 1.51 times less risky than Timothy Plan. It trades about 0.07 of its potential returns per unit of risk. Timothy Plan Large is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 966.00 in Timothy Plan Large on November 2, 2024 and sell it today you would earn a total of 349.00 from holding Timothy Plan Large or generate 36.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Timothy Plan Large
Performance |
| Timeline |
NYSE Composite and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Timothy Plan Large
Pair trading matchups for Timothy Plan
Pair Trading with NYSE Composite and Timothy Plan
The main advantage of trading using opposite NYSE Composite and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
| Timothy Plan vs. Timothy Largemid Cap Value | Timothy Plan vs. Timothy Small Cap Value | Timothy Plan vs. Timothy Aggressive Growth | Timothy Plan vs. Timothy Plan International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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