Correlation Between Hartford Total and Vanguard
Can any of the company-specific risk be diversified away by investing in both Hartford Total and Vanguard 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 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 SP 500, you can compare the effects of market volatilities on Hartford Total and Vanguard 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and Vanguard.
Diversification Opportunities for Hartford Total and Vanguard
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hartford and Vanguard is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and Vanguard SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard SP 500 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard SP 500 has no effect on the direction of Hartford Total i.e., Hartford Total and Vanguard go up and down completely randomly.
Pair Corralation between Hartford Total and Vanguard
Given the investment horizon of 90 days Hartford Total Return is expected to generate 0.56 times more return on investment than Vanguard. However, Hartford Total Return is 1.8 times less risky than Vanguard. It trades about -0.24 of its potential returns per unit of risk. Vanguard SP 500 is currently generating about -0.15 per unit of risk. If you would invest 3,365 in Hartford Total Return on January 26, 2024 and sell it today you would lose (74.00) from holding Hartford Total Return or give up 2.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hartford Total Return vs. Vanguard SP 500
Performance |
Timeline |
Hartford Total Return |
Vanguard SP 500 |
Hartford Total and Vanguard Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hartford Total and Vanguard
The main advantage of trading using opposite Hartford Total and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, Vanguard 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 will offset losses from the drop in Vanguard's long position.Hartford Total vs. Fidelity Corporate Bond | Hartford Total vs. Fidelity Limited Term | Hartford Total vs. Fidelity High Yield | Hartford Total vs. Fidelity High Dividend |
Vanguard vs. SPDR MSCI EAFE | Vanguard vs. SPDR MSCI Emerging | Vanguard vs. SPDR Russell 1000 | Vanguard vs. SPDR Russell 1000 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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