Correlation Between Hartford Municipal and Vanguard Intermediate
Can any of the company-specific risk be diversified away by investing in both Hartford Municipal and Vanguard Intermediate 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 Municipal and Vanguard Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Municipal Opportunities and Vanguard Intermediate Term Tax Exempt, you can compare the effects of market volatilities on Hartford Municipal and Vanguard Intermediate 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 Municipal with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Municipal and Vanguard Intermediate.
Diversification Opportunities for Hartford Municipal and Vanguard Intermediate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hartford and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Municipal Opportuniti and Vanguard Intermediate Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and Hartford Municipal 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 Municipal Opportunities are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of Hartford Municipal i.e., Hartford Municipal and Vanguard Intermediate go up and down completely randomly.
Pair Corralation between Hartford Municipal and Vanguard Intermediate
Given the investment horizon of 90 days Hartford Municipal Opportunities is expected to generate about the same return on investment as Vanguard Intermediate Term Tax Exempt. However, Hartford Municipal is 1.14 times more volatile than Vanguard Intermediate Term Tax Exempt. It trades about -0.04 of its potential returns per unit of risk. Vanguard Intermediate Term Tax Exempt is currently producing about -0.05 per unit of risk. If you would invest 10,055 in Vanguard Intermediate Term Tax Exempt on August 25, 2024 and sell it today you would lose (51.00) from holding Vanguard Intermediate Term Tax Exempt or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Municipal Opportuniti vs. Vanguard Intermediate Term Tax
Performance |
| Timeline |
| Hartford Municipal |
| Vanguard Intermediate |
Hartford Municipal and Vanguard Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Municipal and Vanguard Intermediate
The main advantage of trading using opposite Hartford Municipal and Vanguard Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Municipal position performs unexpectedly, Vanguard Intermediate 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 Intermediate will offset losses from the drop in Vanguard Intermediate's long position.| Hartford Municipal vs. IQ MacKay Municipal | Hartford Municipal vs. IQ MacKay Municipal | Hartford Municipal vs. Franklin Liberty Federal | Hartford Municipal vs. Franklin Liberty Intermediate |
| Vanguard Intermediate vs. SSGA Active Trust | Vanguard Intermediate vs. SPDR Nuveen Municipal | Vanguard Intermediate vs. Xtrackers California Municipal | Vanguard Intermediate vs. iShares Short Maturity |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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