Correlation Between Vanguard Explorer and The Hartford
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and The Hartford 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 Explorer and The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and The Hartford Balanced, you can compare the effects of market volatilities on Vanguard Explorer and The Hartford 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 Explorer with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and The Hartford.
Diversification Opportunities for Vanguard Explorer and The Hartford
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and The is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced and Vanguard Explorer 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 Explorer Fund are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Balanced has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and The Hartford go up and down completely randomly.
Pair Corralation between Vanguard Explorer and The Hartford
Assuming the 90 days horizon Vanguard Explorer Fund is expected to generate 2.44 times more return on investment than The Hartford. However, Vanguard Explorer is 2.44 times more volatile than The Hartford Balanced. It trades about 0.05 of its potential returns per unit of risk. The Hartford Balanced is currently generating about 0.05 per unit of risk. If you would invest 10,133 in Vanguard Explorer Fund on September 3, 2024 and sell it today you would earn a total of 3,060 from holding Vanguard Explorer Fund or generate 30.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. The Hartford Balanced
Performance |
| Timeline |
| Vanguard Explorer |
| Hartford Balanced |
Vanguard Explorer and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and The Hartford
The main advantage of trading using opposite Vanguard Explorer and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Fund | Vanguard Explorer vs. SCOR PK | Vanguard Explorer vs. HUMANA INC |
| The Hartford vs. Vanguard Lifestrategy Moderate | The Hartford vs. Vanguard Lifestrategy Income | The Hartford vs. Vanguard Lifestrategy Growth | The Hartford vs. Vanguard Explorer Fund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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