Correlation Between Target Retirement and Timothy Aggressive

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Can any of the company-specific risk be diversified away by investing in both Target Retirement 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 Target Retirement and Timothy Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Retirement 2040 and Timothy Aggressive Growth, you can compare the effects of market volatilities on Target Retirement 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 Target Retirement with a short position of Timothy Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Retirement and Timothy Aggressive.

Diversification Opportunities for Target Retirement and Timothy Aggressive

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Target and Timothy is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Target Retirement 2040 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 Target Retirement 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 Target Retirement 2040 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 Target Retirement i.e., Target Retirement and Timothy Aggressive go up and down completely randomly.

Pair Corralation between Target Retirement and Timothy Aggressive

Assuming the 90 days horizon Target Retirement is expected to generate 1.95 times less return on investment than Timothy Aggressive. But when comparing it to its historical volatility, Target Retirement 2040 is 2.24 times less risky than Timothy Aggressive. It trades about 0.3 of its potential returns per unit of risk. Timothy Aggressive Growth is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,142  in Timothy Aggressive Growth on May 1, 2025 and sell it today you would earn a total of  204.00  from holding Timothy Aggressive Growth or generate 17.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Target Retirement 2040  vs.  Timothy Aggressive Growth

 Performance 
       Timeline  
Target Retirement 2040 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Target Retirement 2040 are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Target Retirement may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Timothy Aggressive Growth 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Aggressive Growth are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Timothy Aggressive showed solid returns over the last few months and may actually be approaching a breakup point.

Target Retirement and Timothy Aggressive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Target Retirement and Timothy Aggressive

The main advantage of trading using opposite Target Retirement and Timothy Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Retirement 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 Target Retirement 2040 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.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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