Correlation Between Fidelity Covington and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both Fidelity Covington and Vanguard Growth 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 Covington and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Covington Trust and Vanguard Growth Index, you can compare the effects of market volatilities on Fidelity Covington and Vanguard Growth 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 Covington with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Covington and Vanguard Growth.
Diversification Opportunities for Fidelity Covington and Vanguard Growth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Covington Trust and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and Fidelity Covington 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 Covington Trust are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of Fidelity Covington i.e., Fidelity Covington and Vanguard Growth go up and down completely randomly.
Pair Corralation between Fidelity Covington and Vanguard Growth
Given the investment horizon of 90 days Fidelity Covington Trust is expected to generate 1.12 times more return on investment than Vanguard Growth. However, Fidelity Covington is 1.12 times more volatile than Vanguard Growth Index. It trades about 0.11 of its potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.12 per unit of risk. If you would invest 1,319 in Fidelity Covington Trust on September 1, 2024 and sell it today you would earn a total of 1,220 from holding Fidelity Covington Trust or generate 92.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Covington Trust vs. Vanguard Growth Index
Performance |
| Timeline |
| Fidelity Covington Trust |
| Vanguard Growth Index |
Fidelity Covington and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Covington and Vanguard Growth
The main advantage of trading using opposite Fidelity Covington and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Covington position performs unexpectedly, Vanguard Growth 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 Growth will offset losses from the drop in Vanguard Growth's long position.| Fidelity Covington vs. Vanguard Growth Index | Fidelity Covington vs. iShares Russell 1000 | Fidelity Covington vs. iShares SP 500 | Fidelity Covington vs. iShares Core SP |
| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Information Technology | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard Dividend Appreciation |
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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |