Correlation Between Timothy Plan and Timothy Fixed
Can any of the company-specific risk be diversified away by investing in both Timothy Plan and Timothy Fixed 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 Timothy Plan and Timothy Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timothy Plan Defensive and Timothy Fixed Income, you can compare the effects of market volatilities on Timothy Plan and Timothy Fixed 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 Timothy Plan with a short position of Timothy Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and Timothy Fixed.
Diversification Opportunities for Timothy Plan and Timothy Fixed
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Timothy and Timothy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Defensive and Timothy Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Fixed Income and Timothy Plan 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 Timothy Plan Defensive are associated (or correlated) with Timothy Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Fixed Income has no effect on the direction of Timothy Plan i.e., Timothy Plan and Timothy Fixed go up and down completely randomly.
Pair Corralation between Timothy Plan and Timothy Fixed
Assuming the 90 days horizon Timothy Plan Defensive is expected to generate 1.38 times more return on investment than Timothy Fixed. However, Timothy Plan is 1.38 times more volatile than Timothy Fixed Income. It trades about 0.11 of its potential returns per unit of risk. Timothy Fixed Income is currently generating about 0.05 per unit of risk. If you would invest 1,280 in Timothy Plan Defensive on September 3, 2024 and sell it today you would earn a total of 179.00 from holding Timothy Plan Defensive or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timothy Plan Defensive vs. Timothy Fixed Income
Performance |
| Timeline |
| Timothy Plan Defensive |
| Timothy Fixed Income |
Timothy Plan and Timothy Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Plan and Timothy Fixed
The main advantage of trading using opposite Timothy Plan and Timothy Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, Timothy Fixed 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 Fixed will offset losses from the drop in Timothy Fixed's long position.| Timothy Plan vs. Old Westbury Large | Timothy Plan vs. Artisan Thematic Fund | Timothy Plan vs. Federated Mdt Large | Timothy Plan vs. William Blair Large |
| Timothy Fixed vs. Vanguard Total Bond | Timothy Fixed vs. Vanguard Total Bond | Timothy Fixed vs. Vanguard Total Bond | Timothy Fixed vs. Vanguard Total Bond |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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