Looking to diversify beyond VFWAX? The mutual funds below have the lowest correlation with VFWAX — 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 VFWAX.
Best Diversifiers for VFWAX
4 mutual funds have low correlation with VFWAX (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 0.11, roughly unchanged 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... | 0.11 | 0.17 | 0.19 | 84 | Inflation-Protected Bonds | VFWAX vs VTAPX | |
| Vanguard Limited-Term Tax-Exempt Fund Investor Sha... | 0.20 | 0.14 | 0.14 | 75 | Municipal Bonds | VFWAX vs VMLTX | |
| Vanguard Intermediate-Term Tax-Exempt Fund Admiral... | 0.25 | 0.18 | 0.15 | 70 | Municipal Bonds | VFWAX vs VWIUX | |
| Fidelity Floating Rate High Income Fund | 0.26 | 0.26 | 0.34 | 92 | Bank Loan | VFWAX vs FFRHX | |
| Vanguard Short-Term Investment-Grade Fund Admiral ... | 0.36 | 0.26 | 0.22 | 57 | Total Bond Market | VFWAX vs VFSUX |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from VFWAX, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to VFWAX and solid risk/return profiles. The least correlated is Altria Group, Inc. (MO) (Consumer Defensive) with a 1Y correlation of -0.15, down from 0.15 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Altria Group, Inc. | -0.15 | 0.05 | 0.15 | 72 | Consumer Defensive | |
| Exxon Mobil Corporation | -0.10 | 0.09 | 0.23 | 72 | Energy | |
| ConocoPhillips Company | -0.09 | 0.07 | 0.22 | 65 | Energy | |
| Duke Energy Corporation | -0.07 | 0.06 | 0.12 | 62 | Utilities | |
| The Coca-Cola Company | -0.06 | 0.10 | 0.21 | 74 | Consumer Defensive |
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