Correlation Between Hartford Multifactor and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Hartford Multifactor and Vanguard Emerging 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 Multifactor and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Multifactor Developed and Vanguard Emerging Markets, you can compare the effects of market volatilities on Hartford Multifactor and Vanguard Emerging 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 Multifactor with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Multifactor and Vanguard Emerging.
Diversification Opportunities for Hartford Multifactor and Vanguard Emerging
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartford and Vanguard is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Multifactor Developed and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Hartford Multifactor 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 Multifactor Developed are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Hartford Multifactor i.e., Hartford Multifactor and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Hartford Multifactor and Vanguard Emerging
Given the investment horizon of 90 days Hartford Multifactor Developed is expected to under-perform the Vanguard Emerging. In addition to that, Hartford Multifactor is 1.42 times more volatile than Vanguard Emerging Markets. It trades about -0.01 of its total potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.08 per unit of volatility. If you would invest 6,454 in Vanguard Emerging Markets on August 30, 2024 and sell it today you would earn a total of 49.00 from holding Vanguard Emerging Markets or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Multifactor Developed vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Hartford Multifactor |
| Vanguard Emerging Markets |
Hartford Multifactor and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Multifactor and Vanguard Emerging
The main advantage of trading using opposite Hartford Multifactor and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Multifactor position performs unexpectedly, Vanguard Emerging 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 Emerging will offset losses from the drop in Vanguard Emerging's long position.| Hartford Multifactor vs. Vanguard International Dividend | Hartford Multifactor vs. Vanguard Global ex US | Hartford Multifactor vs. Vanguard High Dividend | Hartford Multifactor vs. Vanguard Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |