Correlation Between Vanguard FTSE and Timothy Plan

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

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

Diversification Opportunities for Vanguard FTSE and Timothy Plan

0.98

Correlation Coefficient

Vanguard FTSE  Timothy Plan

Almost no diversification

The 3 months correlation between Vanguard and Timothy is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Timothy Plan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Interna and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan Interna has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Timothy Plan go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Timothy Plan

Considering the 90-day investment horizon Vanguard FTSE is expected to generate 1.18 times less return on investment than Timothy Plan. In addition to that, Vanguard FTSE is 1.0 times more volatile than Timothy Plan International. It trades about 0.14 of its total potential returns per unit of risk. Timothy Plan International is currently generating about 0.17 per unit of volatility. If you would invest  2,647  in Timothy Plan International on December 29, 2024 and sell it today you would earn a total of  242.00  from holding Timothy Plan International or generate 9.14% return on investment over 90 days.

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

Vanguard FTSE Developed  vs.  Timothy Plan International

Vanguard FTSE Developed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Timothy Plan Interna

Risk-Adjusted Performance

Good

Over the last 90 days Timothy Plan International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak forward indicators, Timothy Plan may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vanguard FTSE and Timothy Plan

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

The idea behind Vanguard FTSE Developed and Timothy Plan International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.