Correlation Between Guidestone Value and Balanced Allocation
Can any of the company-specific risk be diversified away by investing in both Guidestone Value and Balanced Allocation 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 Balanced Allocation 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 Balanced Allocation Fund, you can compare the effects of market volatilities on Guidestone Value and Balanced Allocation 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 Balanced Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidestone Value and Balanced Allocation.
Diversification Opportunities for Guidestone Value and Balanced Allocation
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guidestone and Balanced is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Value Equity and Balanced Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Allocation 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 Balanced Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Allocation has no effect on the direction of Guidestone Value i.e., Guidestone Value and Balanced Allocation go up and down completely randomly.
Pair Corralation between Guidestone Value and Balanced Allocation
Assuming the 90 days horizon Guidestone Value Equity is expected to generate 1.81 times more return on investment than Balanced Allocation. However, Guidestone Value is 1.81 times more volatile than Balanced Allocation Fund. It trades about 0.16 of its potential returns per unit of risk. Balanced Allocation Fund is currently generating about 0.22 per unit of risk. If you would invest 1,191 in Guidestone Value Equity on June 1, 2025 and sell it today you would earn a total of 70.00 from holding Guidestone Value Equity or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidestone Value Equity vs. Balanced Allocation Fund
Performance |
| Timeline |
| Guidestone Value Equity |
| Balanced Allocation |
Guidestone Value and Balanced Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidestone Value and Balanced Allocation
The main advantage of trading using opposite Guidestone Value and Balanced Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidestone Value position performs unexpectedly, Balanced Allocation 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 Balanced Allocation will offset losses from the drop in Balanced Allocation's long position.| Guidestone Value vs. Growth Allocation Fund | Guidestone Value vs. Defensive Market Strategies | Guidestone Value vs. Defensive Market Strategies | Guidestone Value vs. Value Equity Institutional |
| Balanced Allocation vs. Jpmorgan Diversified Fund | Balanced Allocation vs. Wilmington Diversified Income | Balanced Allocation vs. Brown Advisory Small Cap | Balanced Allocation vs. Victory Diversified Stock |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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