Correlation Between Vanguard Mid-cap and Hartford Schroders
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid-cap and Hartford Schroders 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 Mid-cap and Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Index and Hartford Schroders Smallmid, you can compare the effects of market volatilities on Vanguard Mid-cap and Hartford Schroders 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 Mid-cap with a short position of Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid-cap and Hartford Schroders.
Diversification Opportunities for Vanguard Mid-cap and Hartford Schroders
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Hartford is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Index and Hartford Schroders Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders and Vanguard Mid-cap 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 Mid Cap Index are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Vanguard Mid-cap i.e., Vanguard Mid-cap and Hartford Schroders go up and down completely randomly.
Pair Corralation between Vanguard Mid-cap and Hartford Schroders
Assuming the 90 days horizon Vanguard Mid Cap Index is expected to generate 1.1 times more return on investment than Hartford Schroders. However, Vanguard Mid-cap is 1.1 times more volatile than Hartford Schroders Smallmid. It trades about 0.08 of its potential returns per unit of risk. Hartford Schroders Smallmid is currently generating about 0.06 per unit of risk. If you would invest 5,535 in Vanguard Mid Cap Index on August 30, 2024 and sell it today you would earn a total of 2,232 from holding Vanguard Mid Cap Index or generate 40.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Index vs. Hartford Schroders Smallmid
Performance |
| Timeline |
| Vanguard Mid Cap |
| Hartford Schroders |
Vanguard Mid-cap and Hartford Schroders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid-cap and Hartford Schroders
The main advantage of trading using opposite Vanguard Mid-cap and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid-cap position performs unexpectedly, Hartford Schroders 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 Schroders will offset losses from the drop in Hartford Schroders' long position.| Vanguard Mid-cap vs. Vanguard Small Cap Index | Vanguard Mid-cap vs. Vanguard Institutional Index | Vanguard Mid-cap vs. Vanguard Total Bond | Vanguard Mid-cap vs. Vanguard Total International |
| Hartford Schroders vs. Vanguard Mid Cap Index | Hartford Schroders vs. Vanguard Mid Cap Index | Hartford Schroders vs. Vanguard Mid Cap Index | Hartford Schroders vs. Vanguard Extended Market |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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