Correlation Between Hartford Growth and Vanguard Growth

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

By analyzing existing cross correlation between Hartford Growth Opportunities and Vanguard Growth Index, you can compare the effects of market volatilities on Hartford Growth and Vanguard Growth 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 Growth with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Growth and Vanguard Growth.

Diversification Opportunities for Hartford Growth and Vanguard Growth

0.95

Correlation Coefficient

Hartford Growth  Vanguard Growth

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 Growth Opportunities and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and Hartford Growth 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 Growth Opportunities are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of Hartford Growth i.e., Hartford Growth and Vanguard Growth go up and down completely randomly.

Pair Corralation between Hartford Growth and Vanguard Growth

Assuming the 90 days horizon Hartford Growth Opportunities is expected to generate 1.1 times more return on investment than Vanguard Growth. However, Hartford Growth is 1.1 times more volatile than Vanguard Growth Index. It trades about 0.08 of its potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.08 per unit of risk. If you would invest  6,570  in Hartford Growth Opportunities on September 29, 2024 and sell it today you would earn a total of  884.00  from holding Hartford Growth Opportunities or generate 13.46% return on investment over 90 days.

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

Hartford Growth Opportunities  vs.  Vanguard Growth Index

Hartford Growth Oppo

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Growth Opportunities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hartford Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vanguard Growth Index

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Index are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Vanguard Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hartford Growth and Vanguard Growth

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

The idea behind Hartford Growth Opportunities and Vanguard Growth Index 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.