Correlation Between Guidestone Funds and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Guidestone Funds and Defensive Market 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 Defensive Market 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 Defensive Market Strategies, you can compare the effects of market volatilities on Guidestone Funds and Defensive Market 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 Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Funds and Defensive Market.
Diversification Opportunities for Guidestone Funds and Defensive Market
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidestone and Defensive is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Funds Impact and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Guidestone Funds i.e., Guidestone Funds and Defensive Market go up and down completely randomly.
Pair Corralation between Guidestone Funds and Defensive Market
Assuming the 90 days horizon Guidestone Funds Impact is expected to generate 1.33 times more return on investment than Defensive Market. However, Guidestone Funds is 1.33 times more volatile than Defensive Market Strategies. It trades about 0.23 of its potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.1 per unit of risk. If you would invest 1,145 in Guidestone Funds Impact on October 20, 2024 and sell it today you would earn a total of 36.00 from holding Guidestone Funds Impact or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidestone Funds Impact vs. Defensive Market Strategies
Performance |
| Timeline |
| Guidestone Funds Impact |
| Defensive Market Str |
Guidestone Funds and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidestone Funds and Defensive Market
The main advantage of trading using opposite Guidestone Funds and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Funds position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Guidestone Funds vs. Dws Government Money | Guidestone Funds vs. Alpine Ultra Short | Guidestone Funds vs. Dunham Porategovernment Bond | Guidestone Funds vs. Access Capital Munity |
| Defensive Market vs. Davis Financial Fund | Defensive Market vs. Goldman Sachs Financial | Defensive Market vs. Mesirow Financial Small | Defensive Market vs. Fidelity Advisor Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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