Correlation Between Vanguard Strategic and The Hartford
Can any of the company-specific risk be diversified away by investing in both Vanguard Strategic 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 Strategic 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 Strategic Small Cap and The Hartford Small, you can compare the effects of market volatilities on Vanguard Strategic 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 Strategic with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Strategic and The Hartford.
Diversification Opportunities for Vanguard Strategic and The Hartford
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and The is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Strategic Small Cap 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 Strategic 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 Strategic Small Cap 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 Strategic i.e., Vanguard Strategic and The Hartford go up and down completely randomly.
Pair Corralation between Vanguard Strategic and The Hartford
Assuming the 90 days horizon Vanguard Strategic is expected to generate 1.32 times less return on investment than The Hartford. In addition to that, Vanguard Strategic is 1.12 times more volatile than The Hartford Small. It trades about 0.03 of its total potential returns per unit of risk. The Hartford Small is currently generating about 0.04 per unit of volatility. If you would invest 2,339 in The Hartford Small on November 27, 2024 and sell it today you would earn a total of 545.00 from holding The Hartford Small or generate 23.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Strategic Small Cap vs. The Hartford Small
Performance |
| Timeline |
| Vanguard Strategic |
| Hartford Small |
Vanguard Strategic and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Strategic and The Hartford
The main advantage of trading using opposite Vanguard Strategic and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Strategic 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 Strategic vs. Vanguard Explorer Value | Vanguard Strategic vs. Vanguard Strategic Equity | Vanguard Strategic vs. Vanguard Diversified Equity | Vanguard Strategic vs. Vanguard Mid Cap |
| The Hartford vs. Transamerica Financial Life | The Hartford vs. Blackrock Smid Cap Growth | The Hartford vs. T Rowe Price | The Hartford vs. T Rowe Price |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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