Looking to diversify beyond VSTCX? The mutual funds below have historically moved differently from VSTCX, which may reduce portfolio volatility when combined in a suitable allocation. The stock ideas table highlights individual companies with the same low-correlation characteristics. Correlation can change and does not guarantee that one asset will rise when another falls.
Best Diversifiers for VSTCX
3 mutual funds have low correlation with VSTCX (below 0.3), 0 of which are negatively correlated. The least correlated is Vanguard Energy Opportunities Fund Investor Shares (VGENX) (Energy Equities) with a 1Y correlation of 0.08, down from 0.49 over 5 years.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| Vanguard Energy Opportunities Fund Investor Shares | 0.08 | 0.35 | 0.49 | 91 | Energy Equities | VSTCX vs VGENX | |
| Vanguard Intermediate-Term Tax-Exempt Fund Investo... | 0.18 | 0.14 | 0.10 | 66 | Municipal Bonds | VSTCX vs VWITX | |
| Baird Short-Term Bond Fund Institutional Class | 0.27 | 0.14 | 0.11 | 95 | Short-Term Bond | VSTCX vs BSBIX | |
| Federated Hermes MDT Small Cap Core Fund | 0.38 | 0.64 | 0.80 | 67 | Small Cap Blend Equities | VSTCX vs QISCX | |
| Vanguard Global Capital Cycles Fund | 0.62 | 0.63 | 0.68 | 95 | Global Equities | VSTCX vs VGPMX |
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Low-Correlation Stock Ideas
The table shows companies with at least $1B in market capitalization, historical correlation data for VSTCX, and a Risk / Return Rank of 50 or higher. Treat them as research candidates rather than evidence that they will offset a future decline. The least correlated is Berkshire Hathaway Inc. (BRK-B) (Financial Services) with a 1Y correlation of 0.12, down from 0.51 over 5 years.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Berkshire Hathaway Inc. | 0.12 | 0.37 | 0.51 | 61 | Financial Services | |
| Atai Life Sciences N.V. | 0.26 | 0.37 | 0.40 | 74 | Healthcare | |
| Pfizer Inc. | 0.27 | 0.29 | 0.26 | 64 | Healthcare | |
| COMPASS Pathways plc | 0.32 | 0.39 | 0.41 | 91 | Healthcare | |
| NVIDIA Corporation | 0.33 | 0.34 | 0.49 | 56 | Technology |
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