Correlation Between Timothy Servative and Timothy Plan

Can any of the company-specific risk be diversified away by investing in both Timothy Servative 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 Timothy Servative and Timothy Plan 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 Plan Small, you can compare the effects of market volatilities on Timothy Servative 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 Timothy Servative with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Servative and Timothy Plan.

Diversification Opportunities for Timothy Servative and Timothy Plan

0.96

Correlation Coefficient

Timothy Servative  Timothy Plan

Almost no diversification

The 3 months correlation between Timothy and Timothy is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Servative Growth and Timothy Plan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Small and Timothy Servative 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 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 Small has no effect on the direction of Timothy Servative i.e., Timothy Servative and Timothy Plan go up and down completely randomly.

Pair Corralation between Timothy Servative and Timothy Plan

Assuming the 90 days horizon Timothy Servative is expected to generate 2.58 times less return on investment than Timothy Plan. But when comparing it to its historical volatility, Timothy Servative Growth is 2.79 times less risky than Timothy Plan. It trades about 0.21 of its potential returns per unit of risk. Timothy Plan Small is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  952.00  in Timothy Plan Small on April 24, 2025 and sell it today you would earn a total of  131.00  from holding Timothy Plan Small or generate 13.76% 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 Plan Small

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 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Timothy Servative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Timothy Plan Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Small are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Timothy Plan showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Timothy Servative and Timothy Plan

The main advantage of trading using opposite Timothy Servative and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Servative 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 Timothy Servative Growth and Timothy Plan Small 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.