Correlation Between Global Bond and Guidestone Value
Can any of the company-specific risk be diversified away by investing in both Global Bond and Guidestone Value 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 Value 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 Value Equity, you can compare the effects of market volatilities on Global Bond and Guidestone Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Bond and Guidestone Value.
Diversification Opportunities for Global Bond and Guidestone Value
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Guidestone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Global Bond Fund and Guidestone Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Value Equity 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Value Equity has no effect on the direction of Global Bond i.e., Global Bond and Guidestone Value go up and down completely randomly.
Pair Corralation between Global Bond and Guidestone Value
Assuming the 90 days horizon Global Bond Fund is expected to generate 0.25 times more return on investment than Guidestone Value. However, Global Bond Fund is 3.95 times less risky than Guidestone Value. It trades about 0.02 of its potential returns per unit of risk. Guidestone Value Equity is currently generating about 0.0 per unit of risk. If you would invest 851.00 in Global Bond Fund on November 1, 2024 and sell it today you would earn a total of 3.00 from holding Global Bond Fund or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Global Bond Fund vs. Guidestone Value Equity
Performance |
| Timeline |
| Global Bond Fund |
| Guidestone Value Equity |
Global Bond and Guidestone Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Bond and Guidestone Value
The main advantage of trading using opposite Global Bond and Guidestone Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Bond position performs unexpectedly, Guidestone Value 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 Value will offset losses from the drop in Guidestone Value's long position.| Global Bond vs. Growth Allocation Fund | Global Bond vs. Defensive Market Strategies | Global Bond vs. Defensive Market Strategies | Global Bond vs. Value Equity Institutional |
| Guidestone Value vs. Access Flex High | Guidestone Value vs. Siit High Yield | Guidestone Value vs. Virtus High Yield | Guidestone Value vs. Ab High Income |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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