Correlation Between Timothy Plan and Fa 529

Can any of the company-specific risk be diversified away by investing in both Timothy Plan and Fa 529 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 Plan and Fa 529 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Timothy Plan Defensive and Fa 529 Aggressive, you can compare the effects of market volatilities on Timothy Plan and Fa 529 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 Plan with a short position of Fa 529. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and Fa 529.

Diversification Opportunities for Timothy Plan and Fa 529

-0.17

Correlation Coefficient

Timothy Plan  Fa 529

Good diversification

The 3 months correlation between Timothy and FFCGX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Defensive and Fa 529 Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fa 529 Aggressive and Timothy Plan 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 Plan Defensive are associated (or correlated) with Fa 529. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fa 529 Aggressive has no effect on the direction of Timothy Plan i.e., Timothy Plan and Fa 529 go up and down completely randomly.

Pair Corralation between Timothy Plan and Fa 529

Assuming the 90 days horizon Timothy Plan Defensive is expected to under-perform the Fa 529. In addition to that, Timothy Plan is 1.33 times more volatile than Fa 529 Aggressive. It trades about -0.13 of its total potential returns per unit of risk. Fa 529 Aggressive is currently generating about 0.26 per unit of volatility. If you would invest  3,947  in Fa 529 Aggressive on September 16, 2024 and sell it today you would earn a total of  88.00  from holding Fa 529 Aggressive or generate 2.23% return on investment over 90 days.

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

Timothy Plan Defensive  vs.  Fa 529 Aggressive

Timothy Plan Defensive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Timothy Plan Defensive has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong 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.

Fa 529 Aggressive

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fa 529 Aggressive are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fa 529 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 Plan and Fa 529

The main advantage of trading using opposite Timothy Plan and Fa 529 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Plan position performs unexpectedly, Fa 529 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 Fa 529 will offset losses from the drop in Fa 529's long position.

The idea behind Timothy Plan Defensive and Fa 529 Aggressive 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.

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 CEOs Directory module to screen CEOs from public companies around the world.