Correlation Between Timothy Plan and Timothy Aggressive

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

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

Diversification Opportunities for Timothy Plan and Timothy Aggressive

-0.56

Correlation Coefficient

Timothy Plan  Timothy Aggressive

Excellent diversification

The 3 months correlation between Timothy and Timothy is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan International and Timothy Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Aggressive Growth 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 International are associated (or correlated) with Timothy Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Aggressive Growth has no effect on the direction of Timothy Plan i.e., Timothy Plan and Timothy Aggressive go up and down completely randomly.

Pair Corralation between Timothy Plan and Timothy Aggressive

Assuming the 90 days horizon Timothy Plan International is expected to generate 0.53 times more return on investment than Timothy Aggressive. However, Timothy Plan International is 1.88 times less risky than Timothy Aggressive. It trades about 0.09 of its potential returns per unit of risk. Timothy Aggressive Growth is currently generating about -0.13 per unit of risk. If you would invest  1,260  in Timothy Plan International on December 29, 2024 and sell it today you would earn a total of  63.00  from holding Timothy Plan International or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Timothy Plan International  vs.  Timothy Aggressive Growth

Timothy Plan Interna

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan International are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Timothy Plan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 weak performance in the last few months, the Fund's technical and 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.

Pair Trading with Timothy Plan and Timothy Aggressive

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

The idea behind Timothy Plan International and Timothy Aggressive 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.