Correlation Between Fidelity Blue and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Fidelity Blue and Vanguard Value at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fidelity Blue and Vanguard Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Blue Chip and Vanguard Value Index, you can compare the effects of market volatilities on Fidelity Blue and Vanguard Value and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fidelity Blue with a short position of Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Blue and Vanguard Value.
Diversification Opportunities for Fidelity Blue and Vanguard Value
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Vanguard is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Blue Chip and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index and Fidelity Blue is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fidelity Blue Chip are associated (or correlated) with Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Fidelity Blue i.e., Fidelity Blue and Vanguard Value go up and down completely randomly.
Pair Corralation between Fidelity Blue and Vanguard Value
Given the investment horizon of 90 days Fidelity Blue is expected to generate 1.35 times less return on investment than Vanguard Value. But when comparing it to its historical volatility, Fidelity Blue Chip is 1.02 times less risky than Vanguard Value. It trades about 0.07 of its potential returns per unit of risk. Vanguard Value Index is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14,150 in Vanguard Value Index on September 12, 2024 and sell it today you would earn a total of 3,454 from holding Vanguard Value Index or generate 24.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Blue Chip vs. Vanguard Value Index
Performance |
| Timeline |
| Fidelity Blue Chip |
| Vanguard Value Index |
Fidelity Blue and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Blue and Vanguard Value
The main advantage of trading using opposite Fidelity Blue and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Blue position performs unexpectedly, Vanguard Value can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vanguard Value will offset losses from the drop in Vanguard Value's long position.| Fidelity Blue vs. Vanguard Value Index | Fidelity Blue vs. Vanguard High Dividend | Fidelity Blue vs. iShares Russell 1000 | Fidelity Blue vs. iShares Core Dividend |
| Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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