Correlation Between Guidestone Funds and Value Equity

Can any of the company-specific risk be diversified away by investing in both Guidestone Funds 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 Funds 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 Funds Impact and Value Equity Institutional, you can compare the effects of market volatilities on Guidestone Funds 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 Funds with a short position of Value Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Funds and Value Equity.

Diversification Opportunities for Guidestone Funds and Value Equity

0.86

Correlation Coefficient

Guidestone Funds  Value Equity

Very poor diversification

The 3 months correlation between Guidestone and Value is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Funds Impact 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 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 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 Funds i.e., Guidestone Funds and Value Equity go up and down completely randomly.

Pair Corralation between Guidestone Funds and Value Equity

Assuming the 90 days horizon Guidestone Funds Impact is expected to generate 1.18 times more return on investment than Value Equity. However, Guidestone Funds is 1.18 times more volatile than Value Equity Institutional. It trades about 0.06 of its potential returns per unit of risk. Value Equity Institutional is currently generating about 0.03 per unit of risk. If you would invest  1,162  in Guidestone Funds Impact on December 21, 2024 and sell it today you would earn a total of  36.00  from holding Guidestone Funds Impact or generate 3.1% 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.  Value Equity Institutional

Guidestone Funds Impact

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guidestone Funds Impact are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidestone Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Value Equity Institu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Value Equity Institutional are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Value Equity 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 Value Equity

The main advantage of trading using opposite Guidestone Funds and Value Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Funds 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.

The idea behind Guidestone Funds Impact and Value Equity Institutional 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.