Correlation Between Hartford Total and Vanguard Short

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hartford Total and Vanguard Short 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 Hartford Total and Vanguard Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Total Return and Vanguard Short Term Bond, you can compare the effects of market volatilities on Hartford Total and Vanguard Short 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 Hartford Total with a short position of Vanguard Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and Vanguard Short.

Diversification Opportunities for Hartford Total and Vanguard Short

0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Hartford and Vanguard is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and Vanguard Short-Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short-Term Bond and Hartford 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 Hartford Total Return are associated (or correlated) with Vanguard Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short-Term Bond has no effect on the direction of Hartford Total i.e., Hartford Total and Vanguard Short go up and down completely randomly.

Pair Corralation between Hartford Total and Vanguard Short

Given the investment horizon of 90 days Hartford Total Return is expected to generate 1.7 times more return on investment than Vanguard Short. However, Hartford Total is 1.7 times more volatile than Vanguard Short Term Bond. It trades about 0.25 of its potential returns per unit of risk. Vanguard Short Term Bond is currently generating about 0.18 per unit of risk. If you would invest  3,334  in Hartford Total Return on December 30, 2023 and sell it today you would earn a total of  40.00  from holding Hartford Total Return or generate 1.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Hartford Total Return  vs.  Vanguard Short-Term Bond

 Performance 
       Timeline  
Hartford Total Return 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Total Return are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hartford Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vanguard Short-Term Bond 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Short Term Bond are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Vanguard Short is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Hartford Total and Vanguard Short Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hartford Total and Vanguard Short

The main advantage of trading using opposite Hartford Total and Vanguard Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, Vanguard Short 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 Vanguard Short will offset losses from the drop in Vanguard Short's long position.
The idea behind Hartford Total Return and Vanguard Short Term Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Commodity Directory
Find actively traded commodities issued by global exchanges
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Global Correlations
Find global opportunities by holding instruments from different markets
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes