Correlation Between Global Bond and Guidestone Funds
Can any of the company-specific risk be diversified away by investing in both Global Bond 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 Global Bond and Guidestone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Bond Fund and Guidestone Funds , you can compare the effects of market volatilities on Global Bond 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 Global Bond with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Guidestone Funds.
Diversification Opportunities for Global Bond and Guidestone Funds
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Guidestone is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Guidestone Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Funds and Global Bond 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 Global Bond Fund 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 has no effect on the direction of Global Bond i.e., Global Bond and Guidestone Funds go up and down completely randomly.
Pair Corralation between Global Bond and Guidestone Funds
Assuming the 90 days horizon Global Bond Fund is expected to generate 0.85 times more return on investment than Guidestone Funds. However, Global Bond Fund is 1.17 times less risky than Guidestone Funds. It trades about 0.04 of its potential returns per unit of risk. Guidestone Funds is currently generating about 0.04 per unit of risk. If you would invest 829.00 in Global Bond Fund on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Global Bond Fund or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Bond Fund vs. Guidestone Funds
Performance |
| Timeline |
| Global Bond Fund |
| Guidestone Funds |
Global Bond and Guidestone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Bond and Guidestone Funds
The main advantage of trading using opposite Global Bond and Guidestone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond 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.| Global Bond vs. Davis Financial Fund | Global Bond vs. 1919 Financial Services | Global Bond vs. Financials Ultrasector Profund | Global Bond vs. Gabelli Global Financial |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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