Correlation Between Alphabet and Timothy Plan

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

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

Diversification Opportunities for Alphabet and Timothy Plan

0.79

Correlation Coefficient

Alphabet  Timothy Plan

Poor diversification

The 3 months correlation between Alphabet and Timothy is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Timothy Plan Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Defensive and Alphabet 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 Alphabet Inc Class C 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 Defensive has no effect on the direction of Alphabet i.e., Alphabet and Timothy Plan go up and down completely randomly.

Pair Corralation between Alphabet and Timothy Plan

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 3.8 times more return on investment than Timothy Plan. However, Alphabet is 3.8 times more volatile than Timothy Plan Defensive. It trades about 0.33 of its potential returns per unit of risk. Timothy Plan Defensive is currently generating about 0.27 per unit of risk. If you would invest  17,740  in Alphabet Inc Class C on July 6, 2025 and sell it today you would earn a total of  6,858  from holding Alphabet Inc Class C or generate 38.66% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Timothy Plan Defensive

Alphabet Class C

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet reported solid returns over the last few months and may actually be approaching a breakup point.

Timothy Plan Defensive

Risk-Adjusted Performance

Solid

Over the last 90 days Timothy Plan Defensive has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak forward indicators, Timothy Plan may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Alphabet and Timothy Plan

The main advantage of trading using opposite Alphabet and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C and Timothy Plan Defensive 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.