Correlation Between SPDR Russell and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both SPDR Russell 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 SPDR Russell and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and Timothy Plan , you can compare the effects of market volatilities on SPDR Russell 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 SPDR Russell with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Timothy Plan.
Diversification Opportunities for SPDR Russell and Timothy Plan
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Timothy is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Timothy Plan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan and SPDR Russell 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 SPDR Russell 1000 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 has no effect on the direction of SPDR Russell i.e., SPDR Russell and Timothy Plan go up and down completely randomly.
Pair Corralation between SPDR Russell and Timothy Plan
Given the investment horizon of 90 days SPDR Russell is expected to generate 1.11 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, SPDR Russell 1000 is 1.14 times less risky than Timothy Plan. It trades about 0.25 of its potential returns per unit of risk. Timothy Plan is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,562 in Timothy Plan on August 27, 2024 and sell it today you would earn a total of 116.00 from holding Timothy Plan or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Russell 1000 vs. Timothy Plan
Performance |
| Timeline |
| SPDR Russell 1000 |
| Timothy Plan |
SPDR Russell and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Timothy Plan
The main advantage of trading using opposite SPDR Russell and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell 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.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| Timothy Plan vs. Timothy Plan | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan Small |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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