Looking to diversify beyond VTSMX? The mutual funds below have historically moved differently from VTSMX, 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 VTSMX
3 mutual funds have low correlation with VTSMX (below 0.3), 1 of which are negatively correlated. The least correlated is Credit Suisse Trust Commodity Return Strategy Portfolio (CCRSX) (Commodities) with a 1Y correlation of -0.07, down from 0.13 over 5 years.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| Credit Suisse Trust Commodity Return Strategy Port... | -0.07 | 0.04 | 0.13 | 76 | Commodities | VTSMX vs CCRSX | |
| AQR Managed Futures Strategy Fund - Class I | 0.12 | 0.07 | -0.10 | 90 | Systematic Trend | VTSMX vs AQMIX | |
| Vanguard Short-Term Bond Index Fund | 0.27 | 0.14 | 0.12 | 53 | Short-Term Bond | VTSMX vs VBISX | |
| Goldman Sachs Strategic Volatility Premium Fund | 0.36 | 0.16 | 0.14 | 97 | Large Cap Blend Equities | VTSMX vs SVPFX | |
| AlphaSimplex Managed Futures Strategy Fund Class A | 0.43 | 0.33 | 0.15 | 65 | Systematic Trend | VTSMX vs AMFAX |
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Low-Correlation Stock Ideas
The table shows companies with at least $1B in market capitalization, historical correlation data for VTSMX, 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. Class A (BRK-A) (Financial Services) with a 1Y correlation of 0.04, down from 0.48 over 5 years.
How candidates are selected| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Berkshire Hathaway Inc. Class A | 0.04 | 0.32 | 0.48 | 58 | Financial Services | |
| DNP Select Income Fund Inc. | 0.19 | 0.27 | 0.35 | 89 | Financial Services | |
| Franco-Nevada Corporation | 0.35 | 0.27 | 0.28 | 70 | Basic Materials |
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