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 Small, 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
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and THE is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Small 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 Small 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 is expected to generate 1.08 times less return on investment than The Hartford. But when comparing it to its historical volatility, Vanguard Explorer Fund is 1.08 times less risky than The Hartford. It trades about 0.05 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,352 in The Hartford Small on August 24, 2024 and sell it today you would earn a total of 756.00 from holding The Hartford Small or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. The Hartford Small
Performance |
| Timeline |
| Vanguard Explorer |
| Hartford Small |
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 Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
| The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Small Cap Growth | The Hartford vs. Vanguard Explorer Fund | 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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