Correlation Between Hartford Emerging and Vaughan Nelson

Can any of the company-specific risk be diversified away by investing in both Hartford Emerging and Vaughan Nelson 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 Emerging and Vaughan Nelson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hartford Emerging Markets and Vaughan Nelson International, you can compare the effects of market volatilities on Hartford Emerging and Vaughan Nelson 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 Emerging with a short position of Vaughan Nelson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Emerging and Vaughan Nelson.

Diversification Opportunities for Hartford Emerging and Vaughan Nelson

0.91

Correlation Coefficient

Hartford Emerging  Vaughan Nelson

Almost no diversification

The 3 months correlation between Hartford and Vaughan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Emerging Markets and Vaughan Nelson International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaughan Nelson Inter and Hartford Emerging 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 Emerging Markets are associated (or correlated) with Vaughan Nelson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaughan Nelson Inter has no effect on the direction of Hartford Emerging i.e., Hartford Emerging and Vaughan Nelson go up and down completely randomly.

Pair Corralation between Hartford Emerging and Vaughan Nelson

Assuming the 90 days horizon Hartford Emerging is expected to generate 1.56 times less return on investment than Vaughan Nelson. But when comparing it to its historical volatility, Hartford Emerging Markets is 1.43 times less risky than Vaughan Nelson. It trades about 0.2 of its potential returns per unit of risk. Vaughan Nelson International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,487  in Vaughan Nelson International on May 6, 2025 and sell it today you would earn a total of  231.00  from holding Vaughan Nelson International or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Hartford Emerging Markets  vs.  Vaughan Nelson International

Hartford Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Emerging Markets are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vaughan Nelson Inter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vaughan Nelson International are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking indicators, Vaughan Nelson showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hartford Emerging and Vaughan Nelson

The main advantage of trading using opposite Hartford Emerging and Vaughan Nelson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Emerging position performs unexpectedly, Vaughan Nelson 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 Vaughan Nelson will offset losses from the drop in Vaughan Nelson's long position.

The idea behind Hartford Emerging Markets and Vaughan Nelson International 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.