Correlation Between Timothy Plan and IShares MSCI

Can any of the company-specific risk be diversified away by investing in both Timothy Plan and IShares MSCI 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 IShares MSCI 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 iShares MSCI Intl, you can compare the effects of market volatilities on Timothy Plan and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Plan and IShares MSCI.

Diversification Opportunities for Timothy Plan and IShares MSCI

0.96

Correlation Coefficient

Timothy Plan  IShares MSCI

Almost no diversification

The 3 months correlation between Timothy and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan International and iShares MSCI Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Intl 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Intl has no effect on the direction of Timothy Plan i.e., Timothy Plan and IShares MSCI go up and down completely randomly.

Pair Corralation between Timothy Plan and IShares MSCI

Given the investment horizon of 90 days Timothy Plan International is expected to generate 0.9 times more return on investment than IShares MSCI. However, Timothy Plan International is 1.11 times less risky than IShares MSCI. It trades about 0.06 of its potential returns per unit of risk. iShares MSCI Intl is currently generating about 0.04 per unit of risk. If you would invest  2,215  in Timothy Plan International on September 17, 2024 and sell it today you would earn a total of  510.00  from holding Timothy Plan International or generate 23.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Timothy Plan International  vs.  iShares MSCI Intl

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 investors with long positions. Despite nearly stable forward indicators, Timothy Plan is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

iShares MSCI Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, IShares MSCI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Timothy Plan and IShares MSCI

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

The idea behind Timothy Plan International and iShares MSCI Intl 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.