Correlation Between Guidestone Funds and Ashmore Emerging

Can any of the company-specific risk be diversified away by investing in both Guidestone Funds and Ashmore Emerging 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 Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guidestone Funds International and Ashmore Emerging Markets, you can compare the effects of market volatilities on Guidestone Funds and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Funds and Ashmore Emerging.

Diversification Opportunities for Guidestone Funds and Ashmore Emerging

0.91

Correlation Coefficient

Guidestone Funds  Ashmore Emerging

Almost no diversification

The 3 months correlation between GuideStone and Ashmore is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Funds International and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 International are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Guidestone Funds i.e., Guidestone Funds and Ashmore Emerging go up and down completely randomly.

Pair Corralation between Guidestone Funds and Ashmore Emerging

Assuming the 90 days horizon Guidestone Funds International is expected to generate 3.62 times more return on investment than Ashmore Emerging. However, Guidestone Funds is 3.62 times more volatile than Ashmore Emerging Markets. It trades about 0.12 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.17 per unit of risk. If you would invest  1,200  in Guidestone Funds International on December 5, 2024 and sell it today you would earn a total of  82.00  from holding Guidestone Funds International or generate 6.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Guidestone Funds International  vs.  Ashmore Emerging Markets

Guidestone Funds Int

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guidestone Funds International are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidestone Funds may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ashmore Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Emerging Markets are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ashmore Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidestone Funds and Ashmore Emerging

The main advantage of trading using opposite Guidestone Funds and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Funds position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.

The idea behind Guidestone Funds International and Ashmore Emerging Markets 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.