Correlation Between Hartford Total and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Hartford Total and Vanguard Value 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 Value 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 Value Index, you can compare the effects of market volatilities on Hartford Total and Vanguard Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and Vanguard Value.
Diversification Opportunities for Hartford Total and Vanguard Value
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hartford and Vanguard is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Hartford Total i.e., Hartford Total and Vanguard Value go up and down completely randomly.
Pair Corralation between Hartford Total and Vanguard Value
Given the investment horizon of 90 days Hartford Total Return is expected to under-perform the Vanguard Value. But the etf apears to be less risky and, when comparing its historical volatility, Hartford Total Return is 1.59 times less risky than Vanguard Value. The etf trades about -0.2 of its potential returns per unit of risk. The Vanguard Value Index is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 16,017 in Vanguard Value Index on January 25, 2024 and sell it today you would lose (188.50) from holding Vanguard Value Index or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hartford Total Return vs. Vanguard Value Index
Performance |
| Timeline |
| Hartford Total Return |
| Vanguard Value Index |
Hartford Total and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Total and Vanguard Value
The main advantage of trading using opposite Hartford Total and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, Vanguard Value 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 Value will offset losses from the drop in Vanguard Value's long position.| Hartford Total vs. Fidelity Corporate Bond | Hartford Total vs. Fidelity Limited Term | Hartford Total vs. Fidelity High Yield | Hartford Total vs. Fidelity High Dividend |
| Vanguard Value vs. Hartford Multifactor Emerging | Vanguard Value vs. Hartford Multifactor Developed | Vanguard Value vs. iShares Equity Factor | Vanguard Value vs. SPDR MSCI USA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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