Correlation Between SPDR SP and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SP 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 SP Dividend and Timothy Plan High, you can compare the effects of market volatilities on SPDR SP 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 SP with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Timothy Plan.
Diversification Opportunities for SPDR SP and Timothy Plan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Timothy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and Timothy Plan High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan High and SPDR SP 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 SP 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 High has no effect on the direction of SPDR SP i.e., SPDR SP and Timothy Plan go up and down completely randomly.
Pair Corralation between SPDR SP and Timothy Plan
Considering the 90-day investment horizon SPDR SP is expected to generate 2.17 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, SPDR SP Dividend is 1.38 times less risky than Timothy Plan. It trades about 0.18 of its potential returns per unit of risk. Timothy Plan High is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,760 in Timothy Plan High on August 28, 2024 and sell it today you would earn a total of 186.00 from holding Timothy Plan High or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Dividend vs. Timothy Plan High
Performance |
| Timeline |
| SPDR SP Dividend |
| Timothy Plan High |
SPDR SP and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Timothy Plan
The main advantage of trading using opposite SPDR SP and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SP vs. iShares Select Dividend | SPDR SP vs. Vanguard Dividend Appreciation | SPDR SP vs. Vanguard High Dividend | SPDR SP vs. ProShares SP 500 |
| Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan Small | Timothy Plan vs. Timothy Plan International | Timothy Plan vs. Timothy Plan |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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