Correlation Between Guggenheim Managed and Timothy Plan

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

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

Diversification Opportunities for Guggenheim Managed and Timothy Plan

0.3

Correlation Coefficient

Guggenheim Managed  Timothy Plan

Weak diversification

The 3 months correlation between Guggenheim and Timothy is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Timothy Plan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Interna and Guggenheim Managed 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 Guggenheim Managed Futures 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 Interna has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Timothy Plan go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Timothy Plan

Assuming the 90 days horizon Guggenheim Managed Futures is expected to generate 0.79 times more return on investment than Timothy Plan. However, Guggenheim Managed Futures is 1.27 times less risky than Timothy Plan. It trades about -0.02 of its potential returns per unit of risk. Timothy Plan International is currently generating about -0.05 per unit of risk. If you would invest  2,152  in Guggenheim Managed Futures on September 14, 2024 and sell it today you would lose (16.00) from holding Guggenheim Managed Futures or give up 0.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Guggenheim Managed Futures  vs.  Timothy Plan International

Guggenheim Managed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Timothy Plan Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Timothy Plan International has generated negative risk-adjusted returns adding no value to fund investors. 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 Guggenheim Managed and Timothy Plan

The main advantage of trading using opposite Guggenheim Managed and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed 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 Guggenheim Managed Futures and Timothy Plan International 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.