Correlation Between Value Fund and Timothy Small-cap
Can any of the company-specific risk be diversified away by investing in both Value Fund and Timothy Small-cap 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 Value Fund and Timothy Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Fund Value and Timothy Small Cap Value, you can compare the effects of market volatilities on Value Fund and Timothy Small-cap 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 Value Fund with a short position of Timothy Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Fund and Timothy Small-cap.
Diversification Opportunities for Value Fund and Timothy Small-cap
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Value and Timothy is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Value Fund Value and Timothy Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Small Cap and Value Fund 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 Value Fund Value are associated (or correlated) with Timothy Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Small Cap has no effect on the direction of Value Fund i.e., Value Fund and Timothy Small-cap go up and down completely randomly.
Pair Corralation between Value Fund and Timothy Small-cap
Assuming the 90 days horizon Value Fund is expected to generate 1.49 times less return on investment than Timothy Small-cap. But when comparing it to its historical volatility, Value Fund Value is 1.93 times less risky than Timothy Small-cap. It trades about 0.21 of its potential returns per unit of risk. Timothy Small Cap Value is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,821 in Timothy Small Cap Value on May 29, 2025 and sell it today you would earn a total of 211.00 from holding Timothy Small Cap Value or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Fund Value vs. Timothy Small Cap Value
Performance |
| Timeline |
| Value Fund Value |
| Timothy Small Cap |
Value Fund and Timothy Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Fund and Timothy Small-cap
The main advantage of trading using opposite Value Fund and Timothy Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Fund position performs unexpectedly, Timothy Small-cap 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 Small-cap will offset losses from the drop in Timothy Small-cap's long position.| Value Fund vs. Technology Ultrasector Profund | Value Fund vs. Science Technology Fund | Value Fund vs. Red Oak Technology | Value Fund vs. Putnam Global Technology |
| Timothy Small-cap vs. Timothy Plan International | Timothy Small-cap vs. Westwood Largecap Value | Timothy Small-cap vs. Advisors Capital Tactical | Timothy Small-cap vs. Value Fund Value |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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