Correlation Between Timothy Plan and Timothy Plan

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

Diversification Opportunities for Timothy Plan and Timothy Plan

0.86

Correlation Coefficient

Timothy Plan  Timothy Plan

Very poor diversification

The 3 months correlation between Timothy and Timothy is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Small and Timothy Plan High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan High 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 Small 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 High has no effect on the direction of Timothy Plan i.e., Timothy Plan and Timothy Plan go up and down completely randomly.

Pair Corralation between Timothy Plan and Timothy Plan

Assuming the 90 days horizon Timothy Plan Small is expected to generate 7.06 times more return on investment than Timothy Plan. However, Timothy Plan is 7.06 times more volatile than Timothy Plan High. It trades about 0.21 of its potential returns per unit of risk. Timothy Plan High is currently generating about 0.37 per unit of risk. If you would invest  951.00  in Timothy Plan Small on April 25, 2025 and sell it today you would earn a total of  150.00  from holding Timothy Plan Small or generate 15.77% return on investment over 90 days.

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

Timothy Plan Small  vs.  Timothy Plan High

Timothy Plan Small

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Small are ranked lower than 16 (%) 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.

Timothy Plan High

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan High are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward 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 Timothy Plan and Timothy Plan

The main advantage of trading using opposite Timothy Plan and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan 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 Plan Small and Timothy Plan High 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.