Correlation Between Guidestone Value and Gabelli Convertible

Can any of the company-specific risk be diversified away by investing in both Guidestone Value and Gabelli Convertible 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 Gabelli Convertible 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 Gabelli Convertible And, you can compare the effects of market volatilities on Guidestone Value and Gabelli Convertible 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 Gabelli Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Value and Gabelli Convertible.

Diversification Opportunities for Guidestone Value and Gabelli Convertible

-0.02

Correlation Coefficient

Guidestone Value  Gabelli Convertible

Good diversification

The 3 months correlation between Guidestone and Gabelli is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Value Equity and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And 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 Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of Guidestone Value i.e., Guidestone Value and Gabelli Convertible go up and down completely randomly.

Pair Corralation between Guidestone Value and Gabelli Convertible

Assuming the 90 days horizon Guidestone Value Equity is expected to under-perform the Gabelli Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guidestone Value Equity is 1.53 times less risky than Gabelli Convertible. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Gabelli Convertible And is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  396.00  in Gabelli Convertible And on October 11, 2024 and sell it today you would lose (11.00) from holding Gabelli Convertible And or give up 2.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Guidestone Value Equity  vs.  Gabelli Convertible And

Guidestone Value Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidestone Value Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Guidestone Value is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Convertible And

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gabelli Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guidestone Value and Gabelli Convertible

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

The idea behind Guidestone Value Equity and Gabelli Convertible And 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.