Correlation Between GM and Guidestone Funds
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Guidestone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Guidestone Funds Impact, you can compare the effects of market volatilities on GM 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 GM with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Guidestone Funds.
Diversification Opportunities for GM and Guidestone Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and Guidestone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Guidestone Funds Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Funds Impact and GM 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 General Motors 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 Impact has no effect on the direction of GM i.e., GM and Guidestone Funds go up and down completely randomly.
Pair Corralation between GM and Guidestone Funds
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.59 times more return on investment than Guidestone Funds. However, GM is 2.59 times more volatile than Guidestone Funds Impact. It trades about 0.08 of its potential returns per unit of risk. Guidestone Funds Impact is currently generating about 0.06 per unit of risk. If you would invest 4,483 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,076 from holding General Motors or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Guidestone Funds Impact
Performance |
| Timeline |
| General Motors |
| Guidestone Funds Impact |
GM and Guidestone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Guidestone Funds
The main advantage of trading using opposite GM and Guidestone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and Guidestone Funds Impact pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Guidestone Funds vs. Dunham Real Estate | Guidestone Funds vs. Us Real Estate | Guidestone Funds vs. Prudential Real Estate | Guidestone Funds vs. Columbia Real Estate |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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