Correlation Between Middlefield Banc and Timothy Plan

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

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

Diversification Opportunities for Middlefield Banc and Timothy Plan

-0.52

Correlation Coefficient

Middlefield Banc  Timothy Plan

Excellent diversification

The 3 months correlation between Middlefield and Timothy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Timothy Plan Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Growth and Middlefield Banc 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 Middlefield Banc 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 Growth has no effect on the direction of Middlefield Banc i.e., Middlefield Banc and Timothy Plan go up and down completely randomly.

Pair Corralation between Middlefield Banc and Timothy Plan

Given the investment horizon of 90 days Middlefield Banc is expected to under-perform the Timothy Plan. In addition to that, Middlefield Banc is 4.4 times more volatile than Timothy Plan Growth. It trades about -0.07 of its total potential returns per unit of risk. Timothy Plan Growth is currently generating about 0.06 per unit of volatility. If you would invest  1,033  in Timothy Plan Growth on January 24, 2024 and sell it today you would earn a total of  9.00  from holding Timothy Plan Growth or generate 0.87% return on investment over 90 days.

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

Middlefield Banc  vs.  Timothy Plan Growth

Middlefield Banc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Middlefield Banc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Timothy Plan Growth

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan Growth are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Timothy Plan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Middlefield Banc and Timothy Plan

The main advantage of trading using opposite Middlefield Banc and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc 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 Middlefield Banc and Timothy Plan 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.