Correlation Between Timothy Plan and 6 Meridian
Can any of the company-specific risk be diversified away by investing in both Timothy Plan and 6 Meridian 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 6 Meridian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timothy Plan Small and 6 Meridian Mega, you can compare the effects of market volatilities on Timothy Plan and 6 Meridian 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 6 Meridian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and 6 Meridian.
Diversification Opportunities for Timothy Plan and 6 Meridian
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Timothy and SIXA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Small and 6 Meridian Mega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 6 Meridian Mega 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 Small are associated (or correlated) with 6 Meridian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 6 Meridian Mega has no effect on the direction of Timothy Plan i.e., Timothy Plan and 6 Meridian go up and down completely randomly.
Pair Corralation between Timothy Plan and 6 Meridian
Given the investment horizon of 90 days Timothy Plan Small is expected to generate 1.39 times more return on investment than 6 Meridian. However, Timothy Plan is 1.39 times more volatile than 6 Meridian Mega. It trades about 0.25 of its potential returns per unit of risk. 6 Meridian Mega is currently generating about 0.31 per unit of risk. If you would invest 3,890 in Timothy Plan Small on November 2, 2024 and sell it today you would earn a total of 180.00 from holding Timothy Plan Small or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timothy Plan Small vs. 6 Meridian Mega
Performance |
| Timeline |
| Timothy Plan Small |
| 6 Meridian Mega |
Timothy Plan and 6 Meridian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Plan and 6 Meridian
The main advantage of trading using opposite Timothy Plan and 6 Meridian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, 6 Meridian 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 6 Meridian will offset losses from the drop in 6 Meridian's long position.| Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan International | Timothy Plan vs. Timothy Plan |
| 6 Meridian vs. 6 Meridian Low | 6 Meridian vs. ETC 6 Meridian | 6 Meridian vs. 6 Meridian Small | 6 Meridian vs. Day HaganNed Davis |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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