Correlation Between Nasdaq and Timothy Aggressive

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

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

Diversification Opportunities for Nasdaq and Timothy Aggressive

0.49

Correlation Coefficient

Nasdaq  Timothy Aggressive

Very weak diversification

The 3 months correlation between Nasdaq and Timothy is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Timothy Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Aggressive Growth and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Timothy Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Aggressive Growth has no effect on the direction of Nasdaq i.e., Nasdaq and Timothy Aggressive go up and down completely randomly.

Pair Corralation between Nasdaq and Timothy Aggressive

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.79 times more return on investment than Timothy Aggressive. However, Nasdaq Inc is 1.26 times less risky than Timothy Aggressive. It trades about -0.03 of its potential returns per unit of risk. Timothy Aggressive Growth is currently generating about -0.13 per unit of risk. If you would invest  7,714  in Nasdaq Inc on December 28, 2024 and sell it today you would lose (223.00) from holding Nasdaq Inc or give up 2.89% of portfolio value over 90 days.

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

Nasdaq Inc  vs.  Timothy Aggressive Growth

Nasdaq Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Timothy Aggressive Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Timothy Aggressive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Nasdaq and Timothy Aggressive

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

The idea behind Nasdaq Inc and Timothy Aggressive Growth 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.