Correlation Between Vanguard Global and Hartford Multifactor
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Hartford Multifactor 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 Global and Hartford Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global ex US and Hartford Multifactor Developed, you can compare the effects of market volatilities on Vanguard Global and Hartford Multifactor 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 Global with a short position of Hartford Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Hartford Multifactor.
Diversification Opportunities for Vanguard Global and Hartford Multifactor
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 Global ex US and Hartford Multifactor Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Multifactor and Vanguard Global 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 Global ex US are associated (or correlated) with Hartford Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Multifactor has no effect on the direction of Vanguard Global i.e., Vanguard Global and Hartford Multifactor go up and down completely randomly.
Pair Corralation between Vanguard Global and Hartford Multifactor
Given the investment horizon of 90 days Vanguard Global ex US is expected to under-perform the Hartford Multifactor. In addition to that, Vanguard Global is 1.39 times more volatile than Hartford Multifactor Developed. It trades about -0.07 of its total potential returns per unit of risk. Hartford Multifactor Developed is currently generating about -0.01 per unit of volatility. If you would invest 2,964 in Hartford Multifactor Developed on August 30, 2024 and sell it today you would lose (5.00) from holding Hartford Multifactor Developed or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global ex US vs. Hartford Multifactor Developed
Performance |
| Timeline |
| Vanguard Global ex |
| Hartford Multifactor |
Vanguard Global and Hartford Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Hartford Multifactor
The main advantage of trading using opposite Vanguard Global and Hartford Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Hartford Multifactor 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 Multifactor will offset losses from the drop in Hartford Multifactor's long position.| Vanguard Global vs. Vanguard FTSE All World | Vanguard Global vs. Vanguard Real Estate | Vanguard Global vs. Vanguard Total International | Vanguard Global vs. Schwab REIT ETF |
| Hartford Multifactor vs. Vanguard International Dividend | Hartford Multifactor vs. Vanguard Global ex US | Hartford Multifactor vs. Vanguard High Dividend | Hartford Multifactor vs. Vanguard Emerging Markets |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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