Correlation Between Timothy Plan and Timothy Small-cap
Can any of the company-specific risk be diversified away by investing in both Timothy Plan and Timothy Small-cap 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 Small-cap 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 Timothy Small Cap Value, you can compare the effects of market volatilities on Timothy Plan and Timothy Small-cap 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 Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and Timothy Small-cap.
Diversification Opportunities for Timothy Plan and Timothy Small-cap
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Timothy and TIMOTHY is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan International and Timothy Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Small Cap 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 Timothy Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Small Cap has no effect on the direction of Timothy Plan i.e., Timothy Plan and Timothy Small-cap go up and down completely randomly.
Pair Corralation between Timothy Plan and Timothy Small-cap
Assuming the 90 days horizon Timothy Plan International is expected to under-perform the Timothy Small-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Timothy Plan International is 2.34 times less risky than Timothy Small-cap. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Timothy Small Cap Value is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,062 in Timothy Small Cap Value on August 31, 2024 and sell it today you would earn a total of 166.00 from holding Timothy Small Cap Value or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timothy Plan International vs. Timothy Small Cap Value
Performance |
| Timeline |
| Timothy Plan Interna |
| Timothy Small Cap |
Timothy Plan and Timothy Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Plan and Timothy Small-cap
The main advantage of trading using opposite Timothy Plan and Timothy Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, Timothy Small-cap 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 Small-cap will offset losses from the drop in Timothy Small-cap's long position.| Timothy Plan vs. Vanguard Total International | Timothy Plan vs. Vanguard Developed Markets | Timothy Plan vs. Vanguard Developed Markets | Timothy Plan vs. HUMANA INC |
| Timothy Small-cap vs. Timothy Plan International | Timothy Small-cap vs. Westwood Largecap Value | Timothy Small-cap vs. Advisors Capital Tactical | Timothy Small-cap vs. Value Fund Value |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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