Correlation Between Cref Inflation-linked and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Cref Inflation-linked 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 Cref Inflation-linked and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Timothy Plan International, you can compare the effects of market volatilities on Cref Inflation-linked 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 Cref Inflation-linked with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation-linked and Timothy Plan.
Diversification Opportunities for Cref Inflation-linked and Timothy Plan
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CREF and Timothy is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond 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 Cref Inflation-linked 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 Cref Inflation Linked Bond 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 Cref Inflation-linked i.e., Cref Inflation-linked and Timothy Plan go up and down completely randomly.
Pair Corralation between Cref Inflation-linked and Timothy Plan
Assuming the 90 days trading horizon Cref Inflation-linked is expected to generate 2.6 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, Cref Inflation Linked Bond is 3.22 times less risky than Timothy Plan. It trades about 0.06 of its potential returns per unit of risk. Timothy Plan International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Timothy Plan International on September 4, 2024 and sell it today you would earn a total of 218.00 from holding Timothy Plan International or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Timothy Plan International
Performance |
| Timeline |
| Cref Inflation Linked |
| Timothy Plan Interna |
Cref Inflation-linked and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation-linked and Timothy Plan
The main advantage of trading using opposite Cref Inflation-linked and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation-linked 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.| Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard 500 Index | Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard Total Stock |
| Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Plan Growth | Timothy Plan vs. Timothy Plan Growth |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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