Correlation Between Vanguard Small and Harbor ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Harbor ETF 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 Vanguard Small and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Harbor ETF Trust, you can compare the effects of market volatilities on Vanguard Small and Harbor ETF 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 Vanguard Small with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Harbor ETF.
Diversification Opportunities for Vanguard Small and Harbor ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Harbor is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and Vanguard Small 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 Vanguard Small Cap Value are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of Vanguard Small i.e., Vanguard Small and Harbor ETF go up and down completely randomly.
Pair Corralation between Vanguard Small and Harbor ETF
Considering the 90-day investment horizon Vanguard Small is expected to generate 1.22 times less return on investment than Harbor ETF. But when comparing it to its historical volatility, Vanguard Small Cap Value is 1.36 times less risky than Harbor ETF. It trades about 0.08 of its potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,151 in Harbor ETF Trust on September 12, 2024 and sell it today you would earn a total of 353.00 from holding Harbor ETF Trust or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.63% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Harbor ETF Trust
Performance |
| Timeline |
| Vanguard Small Cap |
| Harbor ETF Trust |
Vanguard Small and Harbor ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Harbor ETF
The main advantage of trading using opposite Vanguard Small and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Harbor ETF 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 Harbor ETF will offset losses from the drop in Harbor ETF's long position.| Vanguard Small vs. American Sierra Gold | Vanguard Small vs. American Century ETF | Vanguard Small vs. Avantis Emerging Markets | Vanguard Small vs. Avantis Emerging Markets |
| Harbor ETF vs. FT Vest Equity | Harbor ETF vs. Northern Lights | Harbor ETF vs. Dimensional International High | Harbor ETF vs. JPMorgan Fundamental Data |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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