Correlation Between Timothy Plan and Rbb Fund

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

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

Diversification Opportunities for Timothy Plan and Rbb Fund

-0.26

Correlation Coefficient

Timothy Plan  Rbb Fund

Very good diversification

The 3 months correlation between Timothy and Rbb is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Plan Market and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund 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 Market are associated (or correlated) with Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund has no effect on the direction of Timothy Plan i.e., Timothy Plan and Rbb Fund go up and down completely randomly.

Pair Corralation between Timothy Plan and Rbb Fund

Given the investment horizon of 90 days Timothy Plan is expected to generate 6.05 times less return on investment than Rbb Fund. But when comparing it to its historical volatility, Timothy Plan Market is 3.02 times less risky than Rbb Fund. It trades about 0.05 of its potential returns per unit of risk. Rbb Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,525  in Rbb Fund on September 14, 2024 and sell it today you would earn a total of  1,149  from holding Rbb Fund or generate 45.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.34%
Values	Daily Returns

Timothy Plan Market  vs.  Rbb Fund

Timothy Plan Market

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Market are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Timothy Plan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Rbb Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rbb Fund are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Rbb Fund is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Timothy Plan and Rbb Fund

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

The idea behind Timothy Plan Market and Rbb Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.