Correlation Between RiverFront Dynamic and Timothy Plan

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Can any of the company-specific risk be diversified away by investing in both RiverFront Dynamic 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 RiverFront Dynamic and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiverFront Dynamic Dividend and Timothy Plan , you can compare the effects of market volatilities on RiverFront Dynamic 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 RiverFront Dynamic with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverFront Dynamic and Timothy Plan.

Diversification Opportunities for RiverFront Dynamic and Timothy Plan

RiverFrontTimothyDiversified AwayRiverFrontTimothyDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between RiverFront and Timothy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding RiverFront Dynamic Dividend and Timothy Plan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan and RiverFront Dynamic 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 RiverFront Dynamic Dividend 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 RiverFront Dynamic i.e., RiverFront Dynamic and Timothy Plan go up and down completely randomly.

Pair Corralation between RiverFront Dynamic and Timothy Plan

Given the investment horizon of 90 days RiverFront Dynamic Dividend is expected to generate 1.27 times more return on investment than Timothy Plan. However, RiverFront Dynamic is 1.27 times more volatile than Timothy Plan . It trades about -0.1 of its potential returns per unit of risk. Timothy Plan is currently generating about -0.22 per unit of risk. If you would invest  5,722  in RiverFront Dynamic Dividend on November 25, 2024 and sell it today you would lose (104.00) from holding RiverFront Dynamic Dividend or give up 1.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

RiverFront Dynamic Dividend  vs.  Timothy Plan

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-202
JavaScript chart by amCharts 3.21.15RFDA TPLE
       Timeline  
RiverFront Dynamic 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days RiverFront Dynamic Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, RiverFront Dynamic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb54.55555.55656.55757.55858.5
Timothy Plan 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Timothy Plan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Timothy Plan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.52626.52727.5

RiverFront Dynamic and Timothy Plan Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.33-0.98-0.63-0.28-0.01130.220.570.921.27 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15RFDA TPLE
       Returns  

Pair Trading with RiverFront Dynamic and Timothy Plan

The main advantage of trading using opposite RiverFront Dynamic and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverFront Dynamic 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.
The idea behind RiverFront Dynamic Dividend and Timothy Plan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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