Correlation Between Vanguard FTSE and Hartford Large

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

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

Diversification Opportunities for Vanguard FTSE and Hartford Large

-0.34

Correlation Coefficient

Vanguard FTSE  Hartford Large

Very good diversification

The 3 months correlation between Vanguard and Hartford is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Pacific and Hartford Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Large Cap and Vanguard FTSE 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 Vanguard FTSE Pacific are associated (or correlated) with Hartford Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Large Cap has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Hartford Large go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Hartford Large

Considering the 90-day investment horizon Vanguard FTSE Pacific is expected to generate 0.52 times more return on investment than Hartford Large. However, Vanguard FTSE Pacific is 1.92 times less risky than Hartford Large. It trades about 0.08 of its potential returns per unit of risk. Hartford Large Cap is currently generating about -0.1 per unit of risk. If you would invest  7,124  in Vanguard FTSE Pacific on December 27, 2024 and sell it today you would earn a total of  317.00  from holding Vanguard FTSE Pacific or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vanguard FTSE Pacific  vs.  Hartford Large Cap

Vanguard FTSE Pacific

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Pacific are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Vanguard FTSE is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Hartford Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartford Large Cap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Vanguard FTSE and Hartford Large

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

The idea behind Vanguard FTSE Pacific and Hartford Large Cap 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..