Correlation Between Vanguard Total and The Hartford
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Total 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 Total International and The Hartford International, you can compare the effects of market volatilities on Vanguard Total 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 Total with a short position of The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and The Hartford.
Diversification Opportunities for Vanguard Total and The Hartford
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and The is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and The Hartford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Interna and Vanguard Total 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 Total International 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 Interna has no effect on the direction of Vanguard Total i.e., Vanguard Total and The Hartford go up and down completely randomly.
Pair Corralation between Vanguard Total and The Hartford
Assuming the 90 days horizon Vanguard Total is expected to generate 1.05 times less return on investment than The Hartford. But when comparing it to its historical volatility, Vanguard Total International is 1.08 times less risky than The Hartford. It trades about 0.04 of its potential returns per unit of risk. The Hartford International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,587 in The Hartford International on January 15, 2025 and sell it today you would earn a total of 276.00 from holding The Hartford International or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. The Hartford International
Performance |
| Timeline |
| Vanguard Total Inter |
| Hartford Interna |
Vanguard Total and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and The Hartford
The main advantage of trading using opposite Vanguard Total and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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 Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Small Cap Index |
| The Hartford vs. The Hartford Dividend | The Hartford vs. The Hartford Small | The Hartford vs. The Hartford Equity | The Hartford vs. The Hartford Midcap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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