Looking to diversify beyond VFIFX? The mutual funds below have the lowest correlation with VFIFX — they tend to move on their own, which can help reduce risk when the rest of your portfolio drops. The stock ideas table highlights individual companies that behave independently from VFIFX.
Best Diversifiers for VFIFX
3 mutual funds have low correlation with VFIFX (below 0.3), 0 of which are negatively correlated. The least correlated is Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares (VTAPX) (Inflation-Protected Bonds) with a 1Y correlation of 0.07, down from 0.19 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| Vanguard Short-Term Inflation-Protected Securities... | 0.07 | 0.15 | 0.19 | 84 | Inflation-Protected Bonds | VFIFX vs VTAPX | |
| Vanguard Energy Opportunities Fund Investor Shares | 0.11 | 0.34 | 0.48 | 61 | Energy Equities | VFIFX vs VGENX | |
| Fidelity Floating Rate High Income Fund | 0.29 | 0.32 | 0.36 | 92 | Bank Loan | VFIFX vs FFRHX | |
| AQR Long-Short Equity Fund | 0.43 | 0.43 | 0.33 | 57 | Long-Short | VFIFX vs QLEIX | |
| AQR Long-Short Equity Fund Class N | 0.43 | 0.43 | 0.33 | 54 | Long-Short, Actively Managed | VFIFX vs QLENX |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from VFIFX, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to VFIFX and solid risk/return profiles. The least correlated is Altria Group, Inc. (MO) (Consumer Defensive) with a 1Y correlation of -0.16, down from 0.15 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Altria Group, Inc. | -0.16 | 0.04 | 0.15 | 72 | Consumer Defensive | |
| Exxon Mobil Corporation | -0.16 | 0.07 | 0.21 | 72 | Energy | |
| ConocoPhillips Company | -0.13 | 0.08 | 0.22 | 65 | Energy | |
| Chevron Corporation | -0.12 | 0.09 | 0.23 | 70 | Energy | |
| The Coca-Cola Company | -0.12 | 0.06 | 0.21 | 74 | Consumer Defensive |
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