Correlation Between Guidestone Fds and International Equity
Can any of the company-specific risk be diversified away by investing in both Guidestone Fds and International Equity 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 Guidestone Fds and International Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidestone Fds Growth and International Equity Institutional, you can compare the effects of market volatilities on Guidestone Fds and International Equity 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 Guidestone Fds with a short position of International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Fds and International Equity.
Diversification Opportunities for Guidestone Fds and International Equity
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidestone and International is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Fds Growth and International Equity Instituti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity and Guidestone Fds 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 Guidestone Fds Growth are associated (or correlated) with International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Guidestone Fds i.e., Guidestone Fds and International Equity go up and down completely randomly.
Pair Corralation between Guidestone Fds and International Equity
Assuming the 90 days horizon Guidestone Fds Growth is expected to generate 1.42 times more return on investment than International Equity. However, Guidestone Fds is 1.42 times more volatile than International Equity Institutional. It trades about 0.09 of its potential returns per unit of risk. International Equity Institutional is currently generating about 0.05 per unit of risk. If you would invest 2,176 in Guidestone Fds Growth on September 1, 2024 and sell it today you would earn a total of 913.00 from holding Guidestone Fds Growth or generate 41.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Guidestone Fds Growth vs. International Equity Instituti
Performance |
| Timeline |
| Guidestone Fds Growth |
| International Equity |
Guidestone Fds and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidestone Fds and International Equity
The main advantage of trading using opposite Guidestone Fds and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Fds position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.| Guidestone Fds vs. Growth Allocation Fund | Guidestone Fds vs. Defensive Market Strategies | Guidestone Fds vs. Defensive Market Strategies | Guidestone Fds vs. Value Equity Institutional |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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