Correlation Between Guidestone Value and Conservative Allocation

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

Diversification Opportunities for Guidestone Value and Conservative Allocation

0.93

Correlation Coefficient

Guidestone Value  Conservative Allocation

Almost no diversification

The 3 months correlation between Guidestone and Conservative is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guidestone Value Equity and Conservative Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conservative 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 Conservative Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conservative Allocation has no effect on the direction of Guidestone Value i.e., Guidestone Value and Conservative Allocation go up and down completely randomly.

Pair Corralation between Guidestone Value and Conservative Allocation

Assuming the 90 days horizon Guidestone Value is expected to generate 1.01 times less return on investment than Conservative Allocation. In addition to that, Guidestone Value is 3.34 times more volatile than Conservative Allocation Fund. It trades about 0.03 of its total potential returns per unit of risk. Conservative Allocation Fund is currently generating about 0.11 per unit of volatility. If you would invest  985.00  in Conservative Allocation Fund on May 4, 2025 and sell it today you would earn a total of  171.00  from holding Conservative Allocation Fund or generate 17.36% 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.  Conservative Allocation Fund

Guidestone Value Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidestone Value Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidestone Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Conservative Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Conservative Allocation Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Conservative Allocation 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 Conservative Allocation

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

The idea behind Guidestone Value Equity and Conservative Allocation Fund 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.