Correlation Between Nasdaq-100(r) and Timothy Plan

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) 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 Nasdaq-100(r) and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Timothy Plan Strategic, you can compare the effects of market volatilities on Nasdaq-100(r) 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 Nasdaq-100(r) with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Timothy Plan.

Diversification Opportunities for Nasdaq-100(r) and Timothy Plan

0.14

Correlation Coefficient

Nasdaq-100(r)  Timothy Plan

Average diversification

The 3 months correlation between Nasdaq-100(r) and Timothy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Timothy Plan Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Strategic and Nasdaq-100(r) 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 100 2x Strategy 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 Strategic has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Timothy Plan go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Timothy Plan

Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Timothy Plan. In addition to that, Nasdaq-100(r) is 4.79 times more volatile than Timothy Plan Strategic. It trades about -0.11 of its total potential returns per unit of risk. Timothy Plan Strategic is currently generating about 0.06 per unit of volatility. If you would invest  953.00  in Timothy Plan Strategic on December 23, 2024 and sell it today you would earn a total of  19.00  from holding Timothy Plan Strategic or generate 1.99% return on investment over 90 days.

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

Nasdaq 100 2x Strategy  vs.  Timothy Plan Strategic

Nasdaq 100 2x

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 2x Strategy 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 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.

Timothy Plan Strategic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Strategic are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Nasdaq-100(r) and Timothy Plan

The main advantage of trading using opposite Nasdaq-100(r) and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) 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 Nasdaq 100 2x Strategy and Timothy Plan Strategic 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.