Correlation Between Guidestone Fds and International Equity

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

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

Diversification Opportunities for Guidestone Fds and International Equity

-0.38

Correlation Coefficient

Guidestone Fds  International Equity

Very good diversification

The 3 months correlation between Guidestone and International is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Fds Growth and International Equity Instituti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity and Guidestone Fds 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 Fds Growth are associated (or correlated) with International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Guidestone Fds i.e., Guidestone Fds and International Equity go up and down completely randomly.

Pair Corralation between Guidestone Fds and International Equity

Assuming the 90 days horizon Guidestone Fds Growth is expected to generate 1.19 times more return on investment than International Equity. However, Guidestone Fds is 1.19 times more volatile than International Equity Institutional. It trades about 0.2 of its potential returns per unit of risk. International Equity Institutional is currently generating about -0.03 per unit of risk. If you would invest  2,736  in Guidestone Fds Growth on August 31, 2024 and sell it today you would earn a total of  328.00  from holding Guidestone Fds Growth or generate 11.99% return on investment over 90 days.

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

Guidestone Fds Growth  vs.  International Equity Instituti

Guidestone Fds Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidestone Fds Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidestone Fds may actually be approaching a critical reversion point that can send shares even higher in December 2024.

International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Equity Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, International 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 Fds and International Equity

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

The idea behind Guidestone Fds Growth and International 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.