Correlation Between Growth Allocation and Guidestone Growth
Can any of the company-specific risk be diversified away by investing in both Growth Allocation and Guidestone Growth 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 Growth Allocation and Guidestone Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Allocation Fund and Guidestone Growth Equity, you can compare the effects of market volatilities on Growth Allocation and Guidestone Growth 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 Growth Allocation with a short position of Guidestone Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Guidestone Growth.
Diversification Opportunities for Growth Allocation and Guidestone Growth
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Guidestone is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Fund and Guidestone Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Growth Equity and Growth Allocation 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 Growth Allocation Fund are associated (or correlated) with Guidestone Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Growth Equity has no effect on the direction of Growth Allocation i.e., Growth Allocation and Guidestone Growth go up and down completely randomly.
Pair Corralation between Growth Allocation and Guidestone Growth
Assuming the 90 days horizon Growth Allocation Fund is expected to generate 0.45 times more return on investment than Guidestone Growth. However, Growth Allocation Fund is 2.22 times less risky than Guidestone Growth. It trades about 0.13 of its potential returns per unit of risk. Guidestone Growth Equity is currently generating about -0.04 per unit of risk. If you would invest 1,267 in Growth Allocation Fund on November 30, 2024 and sell it today you would earn a total of 36.00 from holding Growth Allocation Fund or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Allocation Fund vs. Guidestone Growth Equity
Performance |
| Timeline |
| Growth Allocation |
| Guidestone Growth Equity |
Growth Allocation and Guidestone Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Guidestone Growth
The main advantage of trading using opposite Growth Allocation and Guidestone Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation position performs unexpectedly, Guidestone Growth 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 Growth will offset losses from the drop in Guidestone Growth's long position.| Growth Allocation vs. Ab Bond Inflation | Growth Allocation vs. Rbc Impact Bond | Growth Allocation vs. Doubleline Total Return | Growth Allocation vs. Flexible Bond Portfolio |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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