Correlation Between Vanguard Small and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Hartford Growth 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 Hartford Growth 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 The Hartford Growth, you can compare the effects of market volatilities on Vanguard Small and Hartford Growth 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 Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Hartford Growth.
Diversification Opportunities for Vanguard Small and Hartford Growth
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Hartford is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Vanguard Small i.e., Vanguard Small and Hartford Growth go up and down completely randomly.
Pair Corralation between Vanguard Small and Hartford Growth
Assuming the 90 days horizon Vanguard Small is expected to generate 25.92 times less return on investment than Hartford Growth. But when comparing it to its historical volatility, Vanguard Small Cap Value is 1.42 times less risky than Hartford Growth. It trades about 0.01 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,565 in The Hartford Growth on September 13, 2024 and sell it today you would earn a total of 322.00 from holding The Hartford Growth or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. The Hartford Growth
Performance |
| Timeline |
| Vanguard Small Cap |
| Hartford Growth |
Vanguard Small and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Hartford Growth
The main advantage of trading using opposite Vanguard Small and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Hartford Growth 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 Hartford Growth will offset losses from the drop in Hartford Growth's long position.| Vanguard Small vs. Goehring Rozencwajg Resources | Vanguard Small vs. Invesco Energy Fund | Vanguard Small vs. Fidelity Advisor Energy | Vanguard Small vs. Alpsalerian Energy Infrastructure |
| Hartford Growth vs. Vanguard Small Cap Value | Hartford Growth vs. Amg River Road | Hartford Growth vs. Mutual Of America | Hartford Growth vs. Lord Abbett Small |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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