Correlation Between The Hartford and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both The Hartford and Vanguard Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Balanced and Vanguard Global Credit, you can compare the effects of market volatilities on The Hartford and Vanguard Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Vanguard Global.
Diversification Opportunities for The Hartford and Vanguard Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and VANGUARD is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Vanguard Global Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Credit 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 Balanced are associated (or correlated) with Vanguard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Credit has no effect on the direction of The Hartford i.e., The Hartford and Vanguard Global go up and down completely randomly.
Pair Corralation between The Hartford and Vanguard Global
Assuming the 90 days horizon The Hartford Balanced is expected to generate 1.16 times more return on investment than Vanguard Global. However, The Hartford is 1.16 times more volatile than Vanguard Global Credit. It trades about 0.08 of its potential returns per unit of risk. Vanguard Global Credit is currently generating about -0.06 per unit of risk. If you would invest 1,975 in The Hartford Balanced on August 25, 2024 and sell it today you would earn a total of 9.00 from holding The Hartford Balanced or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Balanced vs. Vanguard Global Credit
Performance |
| Timeline |
| Hartford Balanced |
| Vanguard Global Credit |
The Hartford and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Vanguard Global
The main advantage of trading using opposite The Hartford and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Vanguard Global 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 Global will offset losses from the drop in Vanguard Global's long position.| The Hartford vs. Scharf Global Opportunity | The Hartford vs. Vanguard Global Credit | The Hartford vs. The Hartford Global | The Hartford vs. Nuveen Global Real |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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