Correlation Between Balanced Allocation and Guidestone Funds
Can any of the company-specific risk be diversified away by investing in both Balanced Allocation 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 Balanced Allocation and Guidestone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Allocation Fund and Guidestone Funds International, you can compare the effects of market volatilities on Balanced Allocation 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 Balanced Allocation with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Allocation and Guidestone Funds.
Diversification Opportunities for Balanced Allocation and Guidestone Funds
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Balanced and Guidestone is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Allocation Fund 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 Balanced 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 Balanced Allocation 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 Int has no effect on the direction of Balanced Allocation i.e., Balanced Allocation and Guidestone Funds go up and down completely randomly.
Pair Corralation between Balanced Allocation and Guidestone Funds
Assuming the 90 days horizon Balanced Allocation is expected to generate 1.22 times less return on investment than Guidestone Funds. But when comparing it to its historical volatility, Balanced Allocation Fund is 2.02 times less risky than Guidestone Funds. It trades about 0.09 of its potential returns per unit of risk. Guidestone Funds International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,094 in Guidestone Funds International on November 3, 2024 and sell it today you would earn a total of 114.00 from holding Guidestone Funds International or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Balanced Allocation Fund vs. Guidestone Funds International
Performance |
| Timeline |
| Balanced Allocation |
| Guidestone Funds Int |
Balanced Allocation and Guidestone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Allocation and Guidestone Funds
The main advantage of trading using opposite Balanced Allocation and Guidestone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Allocation 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.| Balanced Allocation vs. Dunham Large Cap | Balanced Allocation vs. Touchstone Large Cap | Balanced Allocation vs. Qs Large Cap | Balanced Allocation vs. Americafirst Large Cap |
| Guidestone Funds vs. Prudential Financial Services | Guidestone Funds vs. Angel Oak Financial | Guidestone Funds vs. 1919 Financial Services | Guidestone Funds vs. Icon Financial Fund |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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