Correlation Between Invesco SP and Timothy Plan

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Can any of the company-specific risk be diversified away by investing in both Invesco SP 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 Invesco SP and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP MidCap and Timothy Plan , you can compare the effects of market volatilities on Invesco SP 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 Invesco SP with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Timothy Plan.

Diversification Opportunities for Invesco SP and Timothy Plan

InvescoTimothyDiversified AwayInvescoTimothyDiversified Away100%
0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Invesco and Timothy is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP MidCap and Timothy Plan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan and Invesco SP 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 Invesco SP MidCap 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 has no effect on the direction of Invesco SP i.e., Invesco SP and Timothy Plan go up and down completely randomly.

Pair Corralation between Invesco SP and Timothy Plan

Given the investment horizon of 90 days Invesco SP MidCap is expected to under-perform the Timothy Plan. In addition to that, Invesco SP is 1.93 times more volatile than Timothy Plan . It trades about -0.33 of its total potential returns per unit of risk. Timothy Plan is currently generating about -0.22 per unit of volatility. If you would invest  2,691  in Timothy Plan on November 25, 2024 and sell it today you would lose (83.00) from holding Timothy Plan or give up 3.08% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Invesco SP MidCap  vs.  Timothy Plan

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-20246
JavaScript chart by amCharts 3.21.15XMMO TPLE
       Timeline  
Invesco SP MidCap 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Invesco SP MidCap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb122124126128130132134136
Timothy Plan 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Timothy Plan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Timothy Plan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.52626.52727.5

Invesco SP and Timothy Plan Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.01-1.53-1.05-0.57-0.09170.310.791.271.752.23 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15XMMO TPLE
       Returns  

Pair Trading with Invesco SP and Timothy Plan

The main advantage of trading using opposite Invesco SP and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP 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.
The idea behind Invesco SP MidCap and Timothy Plan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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