Correlation Between Fidelity Dividend and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both Fidelity Dividend and Vanguard FTSE 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 Dividend and Vanguard FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Dividend for and Vanguard FTSE Developed, you can compare the effects of market volatilities on Fidelity Dividend and Vanguard FTSE 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 Dividend with a short position of Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Dividend and Vanguard FTSE.
Diversification Opportunities for Fidelity Dividend and Vanguard FTSE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Vanguard is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dividend for and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed and Fidelity Dividend 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 Dividend for are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of Fidelity Dividend i.e., Fidelity Dividend and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Fidelity Dividend and Vanguard FTSE
Assuming the 90 days trading horizon Fidelity Dividend for is expected to generate 0.93 times more return on investment than Vanguard FTSE. However, Fidelity Dividend for is 1.08 times less risky than Vanguard FTSE. It trades about 0.17 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.02 per unit of risk. If you would invest 3,896 in Fidelity Dividend for on September 4, 2024 and sell it today you would earn a total of 608.00 from holding Fidelity Dividend for or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Dividend for vs. Vanguard FTSE Developed
Performance |
| Timeline |
| Fidelity Dividend for |
| Vanguard FTSE Developed |
Fidelity Dividend and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Dividend and Vanguard FTSE
The main advantage of trading using opposite Fidelity Dividend and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Dividend position performs unexpectedly, Vanguard FTSE 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 FTSE will offset losses from the drop in Vanguard FTSE's long position.| Fidelity Dividend vs. Vanguard Dividend Appreciation | Fidelity Dividend vs. iShares Dividend Growers | Fidelity Dividend vs. BMO Dividend ETF | Fidelity Dividend vs. BMO High Dividend |
| Vanguard FTSE vs. Fidelity Canadian High | Vanguard FTSE vs. Fidelity High Dividend | Vanguard FTSE vs. Fidelity High Dividend | Vanguard FTSE vs. Fidelity Dividend for |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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