Looking to diversify beyond VFTAX? The mutual funds below have the lowest correlation with VFTAX — 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 VFTAX.
Best Diversifiers for VFTAX
2 mutual funds have low correlation with VFTAX (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 0.04, roughly unchanged from 0.14 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| Vanguard Short-Term Inflation-Protected Securities... | 0.04 | 0.09 | 0.14 | 84 | Inflation-Protected Bonds | VFTAX vs VTAPX | |
| Fidelity Floating Rate High Income Fund | 0.30 | 0.31 | 0.31 | 92 | Bank Loan | VFTAX vs FFRHX | |
| Vanguard Short-Term Investment-Grade Fund Admiral ... | 0.32 | 0.17 | 0.16 | 57 | Total Bond Market | VFTAX vs VFSUX | |
| Goldman Sachs Strategic Volatility Premium Fund | 0.32 | 0.15 | 0.13 | 70 | Large Cap Blend Equities | VFTAX vs SVPFX | |
| BNY Mellon Natural Resources Fund | 0.33 | 0.42 | 0.46 | 62 | Energy Equities | VFTAX vs DLDRX |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from VFTAX, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to VFTAX and solid risk/return profiles. The least correlated is Altria Group, Inc. (MO) (Consumer Defensive) with a 1Y correlation of -0.24, down from 0.08 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Altria Group, Inc. | -0.24 | -0.04 | 0.08 | 72 | Consumer Defensive | |
| Exxon Mobil Corporation | -0.22 | -0.02 | 0.12 | 72 | Energy | |
| Duke Energy Corporation | -0.20 | -0.06 | 0.06 | 62 | Utilities | |
| The Coca-Cola Company | -0.20 | 0.01 | 0.18 | 74 | Consumer Defensive | |
| Chevron Corporation | -0.20 | 0.01 | 0.14 | 70 | Energy |
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