Correlation Between Financial Industries and Guidestone Growth
Can any of the company-specific risk be diversified away by investing in both Financial Industries and Guidestone Growth 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 Financial Industries and Guidestone Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Guidestone Growth Equity, you can compare the effects of market volatilities on Financial Industries and Guidestone Growth 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 Financial Industries with a short position of Guidestone Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Guidestone Growth.
Diversification Opportunities for Financial Industries and Guidestone Growth
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Financial and Guidestone is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and Guidestone Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidestone Growth Equity and Financial Industries 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 Financial Industries Fund are associated (or correlated) with Guidestone Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidestone Growth Equity has no effect on the direction of Financial Industries i.e., Financial Industries and Guidestone Growth go up and down completely randomly.
Pair Corralation between Financial Industries and Guidestone Growth
Assuming the 90 days horizon Financial Industries is expected to generate 2.82 times less return on investment than Guidestone Growth. In addition to that, Financial Industries is 1.11 times more volatile than Guidestone Growth Equity. It trades about 0.07 of its total potential returns per unit of risk. Guidestone Growth Equity is currently generating about 0.21 per unit of volatility. If you would invest 1,636 in Guidestone Growth Equity on June 1, 2025 and sell it today you would earn a total of 173.00 from holding Guidestone Growth Equity or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Financial Industries Fund vs. Guidestone Growth Equity
Performance |
| Timeline |
| Financial Industries |
| Guidestone Growth Equity |
Financial Industries and Guidestone Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Guidestone Growth
The main advantage of trading using opposite Financial Industries and Guidestone Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries position performs unexpectedly, Guidestone Growth 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 Growth will offset losses from the drop in Guidestone Growth's long position.| Financial Industries vs. Fkhemx | Financial Industries vs. Balanced Fund Retail | Financial Industries vs. Fabwx | Financial Industries vs. Wmcanx |
| Guidestone Growth vs. Growth Allocation Fund | Guidestone Growth vs. Defensive Market Strategies | Guidestone Growth vs. Defensive Market Strategies | Guidestone Growth vs. Value Equity Institutional |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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