Correlation Between Vanguard Total and Hartford International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Hartford International 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 Hartford International 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 Hartford International 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 Hartford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Hartford International.
Diversification Opportunities for Vanguard Total and Hartford International
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Hartford 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 International 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 Hartford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Hartford International go up and down completely randomly.
Pair Corralation between Vanguard Total and Hartford International
Assuming the 90 days horizon Vanguard Total is expected to generate 1.18 times less return on investment than Hartford International. But when comparing it to its historical volatility, Vanguard Total International is 1.06 times less risky than Hartford International. It trades about 0.02 of its potential returns per unit of risk. The Hartford International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,865 in The Hartford International on September 1, 2024 and sell it today you would earn a total of 29.00 from holding The Hartford International or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vanguard Total International vs. The Hartford International
Performance |
| Timeline |
| Vanguard Total Inter |
| Hartford International |
Vanguard Total and Hartford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Hartford International
The main advantage of trading using opposite Vanguard Total and Hartford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Hartford International 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 International will offset losses from the drop in Hartford International's long position.| Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Extended Market | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Mid Cap Index |
| Hartford International vs. The Hartford Dividend | Hartford International vs. The Hartford Small | Hartford International vs. The Hartford Equity | Hartford International 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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