Correlation Between Fidelity Dividend and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Fidelity Dividend and Vanguard Total 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 Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Dividend Growth and Vanguard Total Stock, you can compare the effects of market volatilities on Fidelity Dividend and Vanguard Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Dividend and Vanguard Total.
Diversification Opportunities for Fidelity Dividend and Vanguard Total
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Vanguard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Dividend Growth and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock 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 Growth are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Fidelity Dividend i.e., Fidelity Dividend and Vanguard Total go up and down completely randomly.
Pair Corralation between Fidelity Dividend and Vanguard Total
Assuming the 90 days horizon Fidelity Dividend Growth is expected to under-perform the Vanguard Total. In addition to that, Fidelity Dividend is 1.27 times more volatile than Vanguard Total Stock. It trades about -0.1 of its total potential returns per unit of risk. Vanguard Total Stock is currently generating about -0.06 per unit of volatility. If you would invest 14,460 in Vanguard Total Stock on November 28, 2024 and sell it today you would lose (131.00) from holding Vanguard Total Stock or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Dividend Growth vs. Vanguard Total Stock
Performance |
| Timeline |
| Fidelity Dividend Growth |
| Vanguard Total Stock |
Fidelity Dividend and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Dividend and Vanguard Total
The main advantage of trading using opposite Fidelity Dividend and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Dividend position performs unexpectedly, Vanguard Total 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 Total will offset losses from the drop in Vanguard Total's long position.| Fidelity Dividend vs. Fidelity Mid Cap Stock | Fidelity Dividend vs. Fidelity Equity Income Fund | Fidelity Dividend vs. Fidelity Low Priced Stock | Fidelity Dividend vs. Fidelity Diversified International |
| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard 500 Index | Vanguard Total vs. Vanguard Reit 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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