Correlation Between Tidal Trust and Timothy Plan

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

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

Diversification Opportunities for Tidal Trust and Timothy Plan

-0.18

Correlation Coefficient

Tidal Trust  Timothy Plan

Good diversification

The 3 months correlation between Tidal and Timothy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Timothy Plan Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Market and Tidal Trust 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 Tidal Trust II 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 Market has no effect on the direction of Tidal Trust i.e., Tidal Trust and Timothy Plan go up and down completely randomly.

Pair Corralation between Tidal Trust and Timothy Plan

Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the Timothy Plan. In addition to that, Tidal Trust is 1.34 times more volatile than Timothy Plan Market. It trades about -0.25 of its total potential returns per unit of risk. Timothy Plan Market is currently generating about -0.06 per unit of volatility. If you would invest  2,368  in Timothy Plan Market on October 12, 2024 and sell it today you would lose (9.00) from holding Timothy Plan Market or give up 0.38% of portfolio value over 90 days.

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

Tidal Trust II  vs.  Timothy Plan Market

Tidal Trust II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tidal Trust is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Timothy Plan Market

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Market are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Timothy Plan is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tidal Trust and Timothy Plan

The main advantage of trading using opposite Tidal Trust and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust 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 Tidal Trust II and Timothy Plan Market 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.