Correlation Between Hartford Total and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Hartford Total and Vanguard Total 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 Hartford Total and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Total Return and Vanguard Total Stock, you can compare the effects of market volatilities on Hartford Total and Vanguard Total 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 Hartford Total with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and Vanguard Total.
Diversification Opportunities for Hartford Total and Vanguard Total
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hartford and Vanguard is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock and Hartford Total 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 Hartford Total Return are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Hartford Total i.e., Hartford Total and Vanguard Total go up and down completely randomly.
Pair Corralation between Hartford Total and Vanguard Total
Given the investment horizon of 90 days Hartford Total Return is expected to under-perform the Vanguard Total. But the etf apears to be less risky and, when comparing its historical volatility, Hartford Total Return is 2.13 times less risky than Vanguard Total. The etf trades about -0.05 of its potential returns per unit of risk. The Vanguard Total Stock is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24,147 in Vanguard Total Stock on January 25, 2024 and sell it today you would earn a total of 912.00 from holding Vanguard Total Stock or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Total Return vs. Vanguard Total Stock
Performance |
| Timeline |
| Hartford Total Return |
| Vanguard Total Stock |
Hartford Total and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Total and Vanguard Total
The main advantage of trading using opposite Hartford Total and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Hartford Total vs. SPDR Blackstone Senior | Hartford Total vs. SPDR Barclays Intermediate | Hartford Total vs. SPDR Bloomberg Investment | Hartford Total vs. iShares Ultra Short Term |
| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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