Correlation Between Guidestone Value and Tiaa Cref

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

Diversification Opportunities for Guidestone Value and Tiaa Cref

0.53

Correlation Coefficient

Guidestone Value  Tiaa Cref

Very weak diversification

The 3 months correlation between Guidestone and Tiaa is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Value Equity and Tiaa Cref Lifestyle Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifestyle 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifestyle has no effect on the direction of Guidestone Value i.e., Guidestone Value and Tiaa Cref go up and down completely randomly.

Pair Corralation between Guidestone Value and Tiaa Cref

Assuming the 90 days horizon Guidestone Value Equity is expected to under-perform the Tiaa Cref. In addition to that, Guidestone Value is 2.32 times more volatile than Tiaa Cref Lifestyle Moderate. It trades about -0.19 of its total potential returns per unit of risk. Tiaa Cref Lifestyle Moderate is currently generating about -0.1 per unit of volatility. If you would invest  1,503  in Tiaa Cref Lifestyle Moderate on October 11, 2024 and sell it today you would lose (28.00) from holding Tiaa Cref Lifestyle Moderate or give up 1.86% of portfolio value over 90 days.

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

Guidestone Value Equity  vs.  Tiaa Cref Lifestyle Moderate

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.

Tiaa Cref Lifestyle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Lifestyle Moderate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Tiaa Cref 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 Value and Tiaa Cref

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

The idea behind Guidestone Value Equity and Tiaa Cref Lifestyle Moderate 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.