Correlation Between Ford and Guidestone Funds
Can any of the company-specific risk be diversified away by investing in both Ford and Guidestone Funds 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 Ford and Guidestone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Guidestone Funds International, you can compare the effects of market volatilities on Ford and Guidestone Funds 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 Ford with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Guidestone Funds.
Diversification Opportunities for Ford and Guidestone Funds
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and GuideStone is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Guidestone Funds International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Funds Int and Ford 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 Ford Motor are associated (or correlated) with Guidestone Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Funds Int has no effect on the direction of Ford i.e., Ford and Guidestone Funds go up and down completely randomly.
Pair Corralation between Ford and Guidestone Funds
Taking into account the 90-day investment horizon Ford is expected to generate 2.01 times less return on investment than Guidestone Funds. In addition to that, Ford is 2.83 times more volatile than Guidestone Funds International. It trades about 0.01 of its total potential returns per unit of risk. Guidestone Funds International is currently generating about 0.05 per unit of volatility. If you would invest 990.00 in Guidestone Funds International on September 3, 2024 and sell it today you would earn a total of 208.00 from holding Guidestone Funds International or generate 21.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Guidestone Funds International
Performance |
| Timeline |
| Ford Motor |
| Guidestone Funds Int |
Ford and Guidestone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Guidestone Funds
The main advantage of trading using opposite Ford and Guidestone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Guidestone Funds 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 Guidestone Funds will offset losses from the drop in Guidestone Funds' long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Guidestone Funds vs. Goldman Sachs Clean | Guidestone Funds vs. Gamco Global Gold | Guidestone Funds vs. Vy Goldman Sachs | Guidestone Funds vs. Franklin Gold Precious |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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