Correlation Between Mid-cap 15x and Timothy Fixed

Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x and Timothy Fixed 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 Mid-cap 15x and Timothy Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mid Cap 15x Strategy and Timothy Fixed Income, you can compare the effects of market volatilities on Mid-cap 15x and Timothy Fixed 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 Mid-cap 15x with a short position of Timothy Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Timothy Fixed.

Diversification Opportunities for Mid-cap 15x and Timothy Fixed

0.15

Correlation Coefficient

Mid-cap 15x  Timothy Fixed

Average diversification

The 3 months correlation between Mid-cap and Timothy is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Timothy Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Fixed Income and Mid-cap 15x 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 Mid Cap 15x Strategy are associated (or correlated) with Timothy Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Fixed Income has no effect on the direction of Mid-cap 15x i.e., Mid-cap 15x and Timothy Fixed go up and down completely randomly.

Pair Corralation between Mid-cap 15x and Timothy Fixed

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to under-perform the Timothy Fixed. In addition to that, Mid-cap 15x is 5.6 times more volatile than Timothy Fixed Income. It trades about -0.26 of its total potential returns per unit of risk. Timothy Fixed Income is currently generating about -0.5 per unit of volatility. If you would invest  879.00  in Timothy Fixed Income on October 9, 2024 and sell it today you would lose (24.00) from holding Timothy Fixed Income or give up 2.73% of portfolio value over 90 days.

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

Mid Cap 15x Strategy  vs.  Timothy Fixed Income

Mid Cap 15x

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Mid-cap 15x is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Timothy Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Timothy Fixed Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Timothy Fixed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mid-cap 15x and Timothy Fixed

The main advantage of trading using opposite Mid-cap 15x and Timothy Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x position performs unexpectedly, Timothy Fixed 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 Fixed will offset losses from the drop in Timothy Fixed's long position.

The idea behind Mid Cap 15x Strategy and Timothy Fixed Income 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.