Correlation Between The Hartford and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both The Hartford and Vanguard 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 The Hartford and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Healthcare and Vanguard Growth Index, you can compare the effects of market volatilities on The Hartford and Vanguard 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 The Hartford with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Vanguard Growth.
Diversification Opportunities for The Hartford and Vanguard Growth
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between The and Vanguard is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Healthcare and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and The Hartford 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 The Hartford Healthcare are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of The Hartford i.e., The Hartford and Vanguard Growth go up and down completely randomly.
Pair Corralation between The Hartford and Vanguard Growth
Assuming the 90 days horizon The Hartford Healthcare is expected to under-perform the Vanguard Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Hartford Healthcare is 1.05 times less risky than Vanguard Growth. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Vanguard Growth Index is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,086 in Vanguard Growth Index on October 24, 2024 and sell it today you would earn a total of 1,449 from holding Vanguard Growth Index or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
The Hartford Healthcare vs. Vanguard Growth Index
Performance |
| Timeline |
| The Hartford Healthcare |
| Vanguard Growth Index |
The Hartford and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Vanguard Growth
The main advantage of trading using opposite The Hartford and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Vanguard 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 Vanguard Growth will offset losses from the drop in Vanguard Growth's long position.| The Hartford vs. The Hartford Healthcare | The Hartford vs. Hartford Healthcare Hls | The Hartford vs. The Hartford Global | The Hartford vs. Hartford Healthcare Hls |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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