Correlation Between Westwood Largecap and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Timothy Plan 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 Westwood Largecap and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Timothy Plan International, you can compare the effects of market volatilities on Westwood Largecap and Timothy Plan 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 Westwood Largecap with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Timothy Plan.
Diversification Opportunities for Westwood Largecap and Timothy Plan
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westwood and Timothy is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Timothy Plan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Interna and Westwood Largecap 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 Westwood Largecap Value are associated (or correlated) with Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan Interna has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Timothy Plan go up and down completely randomly.
Pair Corralation between Westwood Largecap and Timothy Plan
Assuming the 90 days horizon Westwood Largecap Value is expected to generate 0.74 times more return on investment than Timothy Plan. However, Westwood Largecap Value is 1.36 times less risky than Timothy Plan. It trades about 0.13 of its potential returns per unit of risk. Timothy Plan International is currently generating about 0.02 per unit of risk. If you would invest 1,383 in Westwood Largecap Value on September 2, 2024 and sell it today you would earn a total of 159.00 from holding Westwood Largecap Value or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Largecap Value vs. Timothy Plan International
Performance |
| Timeline |
| Westwood Largecap Value |
| Timothy Plan Interna |
Westwood Largecap and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Timothy Plan
The main advantage of trading using opposite Westwood Largecap and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Timothy Plan 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 Plan will offset losses from the drop in Timothy Plan's long position.| Westwood Largecap vs. The Hartford Small | Westwood Largecap vs. Baird Smallmid Cap | Westwood Largecap vs. Champlain Small | Westwood Largecap vs. Small Pany Growth |
| Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Fixed Income | Timothy Plan vs. Timothy Plan Growth | Timothy Plan vs. Timothy Plan Growth |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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