Correlation Between Timothy Plan and IShares Small
Can any of the company-specific risk be diversified away by investing in both Timothy Plan and IShares Small 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 IShares Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timothy Plan LargeMid and iShares Small Cap, you can compare the effects of market volatilities on Timothy Plan and IShares Small 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 IShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and IShares Small.
Diversification Opportunities for Timothy Plan and IShares Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Timothy and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan LargeMid and iShares Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 LargeMid are associated (or correlated) with IShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Small Cap has no effect on the direction of Timothy Plan i.e., Timothy Plan and IShares Small go up and down completely randomly.
Pair Corralation between Timothy Plan and IShares Small
Given the investment horizon of 90 days Timothy Plan LargeMid is expected to generate 0.65 times more return on investment than IShares Small. However, Timothy Plan LargeMid is 1.53 times less risky than IShares Small. It trades about -0.16 of its potential returns per unit of risk. iShares Small Cap is currently generating about -0.19 per unit of risk. If you would invest 4,465 in Timothy Plan LargeMid on November 29, 2024 and sell it today you would lose (102.00) from holding Timothy Plan LargeMid or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timothy Plan LargeMid vs. iShares Small Cap
Performance |
| Timeline |
| Timothy Plan LargeMid |
| iShares Small Cap |
Timothy Plan and IShares Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Plan and IShares Small
The main advantage of trading using opposite Timothy Plan and IShares Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, IShares Small 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 IShares Small will offset losses from the drop in IShares Small's long position.| Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan Small | Timothy Plan vs. Timothy Plan International | Timothy Plan vs. Timothy Plan |
| IShares Small vs. Horizon Kinetics Inflation | IShares Small vs. Virtus ETF Trust | IShares Small vs. Invesco SP SmallCap | IShares Small vs. iShares MSCI USA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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