Correlation Between Timothy Conservative and Timothy Small

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

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

Diversification Opportunities for Timothy Conservative and Timothy Small

0.95

Correlation Coefficient

Timothy Conservative  Timothy Small

Almost no diversification

The 3 months correlation between Timothy and Timothy is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Servative Growth and Timothy Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Small Cap and Timothy Conservative 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 Servative Growth are associated (or correlated) with Timothy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Small Cap has no effect on the direction of Timothy Conservative i.e., Timothy Conservative and Timothy Small go up and down completely randomly.

Pair Corralation between Timothy Conservative and Timothy Small

Assuming the 90 days horizon Timothy Conservative is expected to generate 2.41 times less return on investment than Timothy Small. But when comparing it to its historical volatility, Timothy Servative Growth is 2.79 times less risky than Timothy Small. It trades about 0.24 of its potential returns per unit of risk. Timothy Small Cap Value is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,715  in Timothy Small Cap Value on April 24, 2025 and sell it today you would earn a total of  257.00  from holding Timothy Small Cap Value or generate 14.99% return on investment over 90 days.

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

Timothy Servative Growth  vs.  Timothy Small Cap Value

Timothy Servative Growth

Risk-Adjusted Performance

Solid

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

Timothy Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Small Cap Value are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Timothy Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Timothy Conservative and Timothy Small

The main advantage of trading using opposite Timothy Conservative and Timothy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Conservative position performs unexpectedly, Timothy Small 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 Small will offset losses from the drop in Timothy Small's long position.

The idea behind Timothy Servative Growth and Timothy Small Cap Value 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.