Correlation Between Timothy Aggressive and Timothy Conservative

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

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

Diversification Opportunities for Timothy Aggressive and Timothy Conservative

-0.17

Correlation Coefficient

Timothy Aggressive  Timothy Conservative

Good diversification

The 3 months correlation between Timothy and Timothy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Aggressive Growth and Timothy Servative Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Servative Growth and Timothy Aggressive 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 Timothy Aggressive Growth are associated (or correlated) with Timothy Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Servative Growth has no effect on the direction of Timothy Aggressive i.e., Timothy Aggressive and Timothy Conservative go up and down completely randomly.

Pair Corralation between Timothy Aggressive and Timothy Conservative

Assuming the 90 days horizon Timothy Aggressive Growth is expected to under-perform the Timothy Conservative. In addition to that, Timothy Aggressive is 4.04 times more volatile than Timothy Servative Growth. It trades about -0.1 of its total potential returns per unit of risk. Timothy Servative Growth is currently generating about 0.07 per unit of volatility. If you would invest  1,012  in Timothy Servative Growth on December 27, 2024 and sell it today you would earn a total of  20.00  from holding Timothy Servative Growth or generate 1.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Timothy Aggressive Growth  vs.  Timothy Servative Growth

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 latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Timothy Servative Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Servative Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Timothy Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Timothy Aggressive and Timothy Conservative

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

The idea behind Timothy Aggressive Growth and Timothy Servative 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.