Correlation Between First Eagle and Timothy Plan

Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Eagle Smid and Timothy Plan Conservative, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Timothy Plan.

Diversification Opportunities for First Eagle and Timothy Plan

0.99

Correlation Coefficient

First Eagle  Timothy Plan

No risk reduction

The 3 months correlation between First and Timothy is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Smid and Timothy Plan Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Conservative and First Eagle 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 First Eagle Smid 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 Conservative has no effect on the direction of First Eagle i.e., First Eagle and Timothy Plan go up and down completely randomly.

Pair Corralation between First Eagle and Timothy Plan

Assuming the 90 days horizon First Eagle Smid is expected to generate 2.48 times more return on investment than Timothy Plan. However, First Eagle is 2.48 times more volatile than Timothy Plan Conservative. It trades about 0.24 of its potential returns per unit of risk. Timothy Plan Conservative is currently generating about 0.24 per unit of risk. If you would invest  1,015  in First Eagle Smid on May 1, 2025 and sell it today you would earn a total of  156.00  from holding First Eagle Smid or generate 15.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

First Eagle Smid  vs.  Timothy Plan Conservative

First Eagle Smid

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Smid are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle showed solid returns over the last few months and may actually be approaching a breakup point.

Timothy Plan Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Conservative are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Timothy Plan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Eagle and Timothy Plan

The main advantage of trading using opposite First Eagle and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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 First Eagle Smid and Timothy Plan Conservative 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.