Correlation Between Fidelity Europe and Vanguard European
Can any of the company-specific risk be diversified away by investing in both Fidelity Europe and Vanguard European 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 Europe and Vanguard European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Europe Fund and Vanguard European Stock, you can compare the effects of market volatilities on Fidelity Europe and Vanguard European 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 Europe with a short position of Vanguard European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Europe and Vanguard European.
Diversification Opportunities for Fidelity Europe and Vanguard European
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 Europe Fund and Vanguard European Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard European Stock and Fidelity Europe 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 Europe Fund are associated (or correlated) with Vanguard European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard European Stock has no effect on the direction of Fidelity Europe i.e., Fidelity Europe and Vanguard European go up and down completely randomly.
Pair Corralation between Fidelity Europe and Vanguard European
Assuming the 90 days horizon Fidelity Europe Fund is expected to generate 0.99 times more return on investment than Vanguard European. However, Fidelity Europe Fund is 1.01 times less risky than Vanguard European. It trades about 0.05 of its potential returns per unit of risk. Vanguard European Stock is currently generating about 0.05 per unit of risk. If you would invest 3,299 in Fidelity Europe Fund on September 4, 2024 and sell it today you would earn a total of 311.00 from holding Fidelity Europe Fund or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Europe Fund vs. Vanguard European Stock
Performance |
| Timeline |
| Fidelity Europe |
| Vanguard European Stock |
Fidelity Europe and Vanguard European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Europe and Vanguard European
The main advantage of trading using opposite Fidelity Europe and Vanguard European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Europe position performs unexpectedly, Vanguard European 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 European will offset losses from the drop in Vanguard European's long position.| Fidelity Europe vs. Fidelity Pacific Basin | Fidelity Europe vs. Fidelity Japan Fund | Fidelity Europe vs. Fidelity Investment Trust | Fidelity Europe vs. Fidelity Nordic Fund |
| Vanguard European vs. Vanguard Materials Index | Vanguard European vs. Vanguard Limited Term Tax Exempt | Vanguard European vs. Vanguard Limited Term Tax Exempt | Vanguard European vs. Vanguard Global Minimum |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |