Correlation Between Guidestone Funds and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Guidestone Funds and Growth Allocation 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 Funds and Growth Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidestone Funds Impact and Growth Allocation Fund, you can compare the effects of market volatilities on Guidestone Funds and Growth Allocation 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 Funds with a short position of Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Funds and Growth Allocation.
Diversification Opportunities for Guidestone Funds and Growth Allocation
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidestone and Growth is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Funds Impact and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation and Guidestone Funds 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 Funds Impact are associated (or correlated) with Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Guidestone Funds i.e., Guidestone Funds and Growth Allocation go up and down completely randomly.
Pair Corralation between Guidestone Funds and Growth Allocation
Assuming the 90 days horizon Guidestone Funds is expected to generate 1.05 times less return on investment than Growth Allocation. In addition to that, Guidestone Funds is 1.39 times more volatile than Growth Allocation Fund. It trades about 0.21 of its total potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.3 per unit of volatility. If you would invest 1,304 in Growth Allocation Fund on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Growth Allocation Fund or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guidestone Funds Impact vs. Growth Allocation Fund
Performance |
| Timeline |
| Guidestone Funds Impact |
| Growth Allocation |
Guidestone Funds and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidestone Funds and Growth Allocation
The main advantage of trading using opposite Guidestone Funds and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Funds position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Guidestone Funds vs. Ab Small Cap | Guidestone Funds vs. Fisher Small Cap | Guidestone Funds vs. The Hartford Small | Guidestone Funds vs. Legg Mason Partners |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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