Correlation Between Value Equity and Guidestone Funds
Can any of the company-specific risk be diversified away by investing in both Value Equity 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 Value Equity and Guidestone Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Equity Investor and Guidestone Funds Impact, you can compare the effects of market volatilities on Value Equity 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 Value Equity with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Equity and Guidestone Funds.
Diversification Opportunities for Value Equity and Guidestone Funds
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Value and Guidestone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Value Equity Investor 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 Value Equity 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 Value Equity Investor 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 Value Equity i.e., Value Equity and Guidestone Funds go up and down completely randomly.
Pair Corralation between Value Equity and Guidestone Funds
Assuming the 90 days horizon Value Equity Investor is expected to generate 0.83 times more return on investment than Guidestone Funds. However, Value Equity Investor is 1.21 times less risky than Guidestone Funds. It trades about 0.29 of its potential returns per unit of risk. Guidestone Funds Impact is currently generating about 0.21 per unit of risk. If you would invest 1,886 in Value Equity Investor on November 9, 2024 and sell it today you would earn a total of 82.00 from holding Value Equity Investor or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Equity Investor vs. Guidestone Funds Impact
Performance |
| Timeline |
| Value Equity Investor |
| Guidestone Funds Impact |
Value Equity and Guidestone Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Equity and Guidestone Funds
The main advantage of trading using opposite Value Equity and Guidestone Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Equity 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.| Value Equity vs. Gmo Quality Fund | Value Equity vs. Transamerica Funds | Value Equity vs. Auxier Focus Fund | Value Equity vs. Issachar Fund Class |
| Guidestone Funds vs. Transamerica International Small | Guidestone Funds vs. Franklin Small Cap | Guidestone Funds vs. Glg Intl Small | Guidestone Funds vs. Rational Defensive Growth |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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