Correlation Between Guidestone Value and Value Equity
Can any of the company-specific risk be diversified away by investing in both Guidestone Value and Value Equity 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 Value and Value Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidestone Value Equity and Value Equity Institutional, you can compare the effects of market volatilities on Guidestone Value and Value Equity 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 Value with a short position of Value Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Value and Value Equity.
Diversification Opportunities for Guidestone Value and Value Equity
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Guidestone and Value is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Value Equity and Value Equity Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Equity Institu and Guidestone Value 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 Value Equity are associated (or correlated) with Value Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Equity Institu has no effect on the direction of Guidestone Value i.e., Guidestone Value and Value Equity go up and down completely randomly.
Pair Corralation between Guidestone Value and Value Equity
Assuming the 90 days horizon Guidestone Value Equity is expected to generate 1.03 times more return on investment than Value Equity. However, Guidestone Value is 1.03 times more volatile than Value Equity Institutional. It trades about 0.31 of its potential returns per unit of risk. Value Equity Institutional is currently generating about 0.26 per unit of risk. If you would invest 1,242 in Guidestone Value Equity on August 31, 2024 and sell it today you would earn a total of 71.00 from holding Guidestone Value Equity or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidestone Value Equity vs. Value Equity Institutional
Performance |
| Timeline |
| Guidestone Value Equity |
| Value Equity Institu |
Guidestone Value and Value Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidestone Value and Value Equity
The main advantage of trading using opposite Guidestone Value and Value Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Value position performs unexpectedly, Value Equity 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 Value Equity will offset losses from the drop in Value Equity's long position.| Guidestone Value vs. Ab Bond Inflation | Guidestone Value vs. Arrow Managed Futures | Guidestone Value vs. Aqr Managed Futures | Guidestone Value vs. Western Asset Inflation |
| Value Equity vs. Vanguard Financials Index | Value Equity vs. Icon Financial Fund | Value Equity vs. Gabelli Global Financial | Value Equity vs. Angel Oak 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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