Correlation Between Fidelity China and Vanguard Windsor
Can any of the company-specific risk be diversified away by investing in both Fidelity China and Vanguard Windsor 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 China and Vanguard Windsor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity China Region and Vanguard Windsor Fund, you can compare the effects of market volatilities on Fidelity China and Vanguard Windsor 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 China with a short position of Vanguard Windsor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity China and Vanguard Windsor.
Diversification Opportunities for Fidelity China and Vanguard Windsor
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Vanguard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity China Region and Vanguard Windsor Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Windsor and Fidelity China 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 China Region are associated (or correlated) with Vanguard Windsor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Windsor has no effect on the direction of Fidelity China i.e., Fidelity China and Vanguard Windsor go up and down completely randomly.
Pair Corralation between Fidelity China and Vanguard Windsor
Assuming the 90 days horizon Fidelity China Region is expected to under-perform the Vanguard Windsor. In addition to that, Fidelity China is 1.6 times more volatile than Vanguard Windsor Fund. It trades about -0.19 of its total potential returns per unit of risk. Vanguard Windsor Fund is currently generating about 0.23 per unit of volatility. If you would invest 8,008 in Vanguard Windsor Fund on August 30, 2024 and sell it today you would earn a total of 363.00 from holding Vanguard Windsor Fund or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fidelity China Region vs. Vanguard Windsor Fund
Performance |
| Timeline |
| Fidelity China Region |
| Vanguard Windsor |
Fidelity China and Vanguard Windsor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity China and Vanguard Windsor
The main advantage of trading using opposite Fidelity China and Vanguard Windsor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity China position performs unexpectedly, Vanguard Windsor 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 Windsor will offset losses from the drop in Vanguard Windsor's long position.| Fidelity China vs. Fidelity Emerging Asia | Fidelity China vs. Fidelity Emerging Markets | Fidelity China vs. Fidelity Canada Fund | Fidelity China vs. Fidelity Pacific Basin |
| Vanguard Windsor vs. Prudential High Yield | Vanguard Windsor vs. Gmo High Yield | Vanguard Windsor vs. Fidelity Capital Income | Vanguard Windsor vs. Dunham High Yield |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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