Correlation Between TRON and Guidestone Funds

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

By analyzing existing cross correlation between TRON and Guidestone Funds Impact, you can compare the effects of market volatilities on TRON and Guidestone Funds 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 TRON with a short position of Guidestone Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and Guidestone Funds.

Diversification Opportunities for TRON and Guidestone Funds

-0.46

Correlation Coefficient

TRON  Guidestone Funds

Very good diversification

The 3 months correlation between TRON and Guidestone is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Guidestone Funds Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Funds Impact and TRON 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 TRON are associated (or correlated) with Guidestone Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Funds Impact has no effect on the direction of TRON i.e., TRON and Guidestone Funds go up and down completely randomly.

Pair Corralation between TRON and Guidestone Funds

Assuming the 90 days trading horizon TRON is expected to under-perform the Guidestone Funds. In addition to that, TRON is 4.88 times more volatile than Guidestone Funds Impact. It trades about -0.11 of its total potential returns per unit of risk. Guidestone Funds Impact is currently generating about -0.18 per unit of volatility. If you would invest  1,202  in Guidestone Funds Impact on October 11, 2024 and sell it today you would lose (37.00) from holding Guidestone Funds Impact or give up 3.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

TRON  vs.  Guidestone Funds Impact

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Guidestone Funds Impact

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidestone Funds Impact has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with TRON and Guidestone Funds

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

The idea behind TRON and Guidestone Funds Impact 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.