Correlation Between IShares ESG and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both IShares ESG 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 IShares ESG and Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG USD and Timothy Plan Small, you can compare the effects of market volatilities on IShares ESG 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 IShares ESG with a short position of Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Timothy Plan.
Diversification Opportunities for IShares ESG and Timothy Plan
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Timothy is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG USD and Timothy Plan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Small and IShares ESG 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 iShares ESG USD 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 Small has no effect on the direction of IShares ESG i.e., IShares ESG and Timothy Plan go up and down completely randomly.
Pair Corralation between IShares ESG and Timothy Plan
Given the investment horizon of 90 days iShares ESG USD is expected to generate 0.33 times more return on investment than Timothy Plan. However, iShares ESG USD is 3.03 times less risky than Timothy Plan. It trades about 0.28 of its potential returns per unit of risk. Timothy Plan Small is currently generating about -0.27 per unit of risk. If you would invest 2,270 in iShares ESG USD on December 5, 2024 and sell it today you would earn a total of 44.00 from holding iShares ESG USD or generate 1.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares ESG USD vs. Timothy Plan Small
Performance |
Timeline |
iShares ESG USD |
Timothy Plan Small |
IShares ESG and Timothy Plan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares ESG and Timothy Plan
The main advantage of trading using opposite IShares ESG and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG 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.IShares ESG vs. VanEck Vectors Moodys | IShares ESG vs. Valued Advisers Trust | IShares ESG vs. Xtrackers California Municipal | IShares ESG vs. Principal Exchange Traded Funds |
Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan High | Timothy Plan vs. Timothy Plan International | Timothy Plan vs. Timothy Plan |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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