Correlation Between Timothy Plan and WisdomTree Europe
Can any of the company-specific risk be diversified away by investing in both Timothy Plan and WisdomTree Europe 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 WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timothy Plan International and WisdomTree Europe SmallCap, you can compare the effects of market volatilities on Timothy Plan and WisdomTree Europe 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 WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and WisdomTree Europe.
Diversification Opportunities for Timothy Plan and WisdomTree Europe
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Timothy and WisdomTree is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan International and WisdomTree Europe SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe 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 International are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe has no effect on the direction of Timothy Plan i.e., Timothy Plan and WisdomTree Europe go up and down completely randomly.
Pair Corralation between Timothy Plan and WisdomTree Europe
Given the investment horizon of 90 days Timothy Plan is expected to generate 1.47 times less return on investment than WisdomTree Europe. But when comparing it to its historical volatility, Timothy Plan International is 1.23 times less risky than WisdomTree Europe. It trades about 0.31 of its potential returns per unit of risk. WisdomTree Europe SmallCap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6,919 in WisdomTree Europe SmallCap on September 27, 2025 and sell it today you would earn a total of 307.00 from holding WisdomTree Europe SmallCap or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Timothy Plan International vs. WisdomTree Europe SmallCap
Performance |
| Timeline |
| Timothy Plan Interna |
| WisdomTree Europe |
Timothy Plan and WisdomTree Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Plan and WisdomTree Europe
The main advantage of trading using opposite Timothy Plan and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, WisdomTree Europe 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 WisdomTree Europe will offset losses from the drop in WisdomTree Europe's long position.| Timothy Plan vs. Innovator Russell 2000 | Timothy Plan vs. WisdomTree International MidCap | Timothy Plan vs. LeaderSharesTM AlphaFactor Core | Timothy Plan vs. Ballast SmallMid Cap |
| WisdomTree Europe vs. WisdomTree International MidCap | WisdomTree Europe vs. iShares MSCI Turkey | WisdomTree Europe vs. iShares Currency Hedged | WisdomTree Europe vs. iShares MSCI Japan |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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