Correlation Between Hartford Total and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Hartford Total and Vanguard Total 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 Total 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 Total Bond, you can compare the effects of market volatilities on Hartford Total and Vanguard Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Total and Vanguard Total.
Diversification Opportunities for Hartford Total and Vanguard Total
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hartford and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Total Return and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of Hartford Total i.e., Hartford Total and Vanguard Total go up and down completely randomly.
Pair Corralation between Hartford Total and Vanguard Total
Given the investment horizon of 90 days Hartford Total Return is expected to under-perform the Vanguard Total. In addition to that, Hartford Total is 1.09 times more volatile than Vanguard Total Bond. It trades about -0.23 of its total potential returns per unit of risk. Vanguard Total Bond is currently generating about -0.23 per unit of volatility. If you would invest 7,219 in Vanguard Total Bond on January 24, 2024 and sell it today you would lose (137.00) from holding Vanguard Total Bond or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Total Return vs. Vanguard Total Bond
Performance |
| Timeline |
| Hartford Total Return |
| Vanguard Total Bond |
Hartford Total and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Total and Vanguard Total
The main advantage of trading using opposite Hartford Total and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Total position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.| Hartford Total vs. SPDR Blackstone Senior | Hartford Total vs. SPDR Barclays Intermediate | Hartford Total vs. SPDR Bloomberg Investment | Hartford Total vs. iShares Ultra Short Term |
| Vanguard Total vs. VictoryShares USAA Core | Vanguard Total vs. VictoryShares International Value | Vanguard Total vs. VictoryShares Small Mid | Vanguard Total vs. VictoryShares Value Momentum |
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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