Correlation Between Fidelity Stock and Vanguard Short-term
Can any of the company-specific risk be diversified away by investing in both Fidelity Stock and Vanguard Short-term 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 Stock and Vanguard Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Stock Selector and Vanguard Short Term Bond, you can compare the effects of market volatilities on Fidelity Stock and Vanguard Short-term 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 Stock with a short position of Vanguard Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Stock and Vanguard Short-term.
Diversification Opportunities for Fidelity Stock and Vanguard Short-term
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fidelity and Vanguard is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Stock Selector and Vanguard Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short Term and Fidelity Stock 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 Stock Selector are associated (or correlated) with Vanguard Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of Fidelity Stock i.e., Fidelity Stock and Vanguard Short-term go up and down completely randomly.
Pair Corralation between Fidelity Stock and Vanguard Short-term
Assuming the 90 days horizon Fidelity Stock Selector is expected to generate 4.8 times more return on investment than Vanguard Short-term. However, Fidelity Stock is 4.8 times more volatile than Vanguard Short Term Bond. It trades about 0.33 of its potential returns per unit of risk. Vanguard Short Term Bond is currently generating about 0.06 per unit of risk. If you would invest 2,825 in Fidelity Stock Selector on August 30, 2024 and sell it today you would earn a total of 158.00 from holding Fidelity Stock Selector or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Stock Selector vs. Vanguard Short Term Bond
Performance |
| Timeline |
| Fidelity Stock Selector |
| Vanguard Short Term |
Fidelity Stock and Vanguard Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Stock and Vanguard Short-term
The main advantage of trading using opposite Fidelity Stock and Vanguard Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Stock position performs unexpectedly, Vanguard Short-term 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 Short-term will offset losses from the drop in Vanguard Short-term's long position.| Fidelity Stock vs. Clearbridge Energy Mlp | Fidelity Stock vs. Dreyfus Natural Resources | Fidelity Stock vs. Energy Services Fund | Fidelity Stock vs. Icon Natural Resources |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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