Correlation Between Timothy Plan and First Trust

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

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

Diversification Opportunities for Timothy Plan and First Trust

0.21

Correlation Coefficient

Timothy Plan  First Trust

Modest diversification

The 3 months correlation between Timothy and First is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan and First Trust Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Bloomberg and Timothy Plan 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 Plan are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Bloomberg has no effect on the direction of Timothy Plan i.e., Timothy Plan and First Trust go up and down completely randomly.

Pair Corralation between Timothy Plan and First Trust

Given the investment horizon of 90 days Timothy Plan is expected to generate 0.99 times more return on investment than First Trust. However, Timothy Plan is 1.01 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Bloomberg is currently generating about -0.02 per unit of risk. If you would invest  2,733  in Timothy Plan on July 23, 2025 and sell it today you would earn a total of  41.00  from holding Timothy Plan or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.13%
Values	Daily Returns

Timothy Plan   vs.  First Trust Bloomberg

Timothy Plan

Risk-Adjusted Performance

Soft

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.

First Trust Bloomberg

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trust Bloomberg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, First Trust is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Timothy Plan and First Trust

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

The idea behind Timothy Plan and First Trust Bloomberg 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.