Correlation Between Fidelity Emerging and Vanguard Pacific
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging and Vanguard Pacific 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 Emerging and Vanguard Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Emerging Asia and Vanguard Pacific Stock, you can compare the effects of market volatilities on Fidelity Emerging and Vanguard Pacific 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 Emerging with a short position of Vanguard Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Vanguard Pacific.
Diversification Opportunities for Fidelity Emerging and Vanguard Pacific
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and Vanguard is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Asia and Vanguard Pacific Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Pacific Stock and Fidelity Emerging 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 Emerging Asia are associated (or correlated) with Vanguard Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Pacific Stock has no effect on the direction of Fidelity Emerging i.e., Fidelity Emerging and Vanguard Pacific go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Vanguard Pacific
Assuming the 90 days horizon Fidelity Emerging is expected to generate 1.79 times less return on investment than Vanguard Pacific. In addition to that, Fidelity Emerging is 1.18 times more volatile than Vanguard Pacific Stock. It trades about 0.06 of its total potential returns per unit of risk. Vanguard Pacific Stock is currently generating about 0.12 per unit of volatility. If you would invest 1,403 in Vanguard Pacific Stock on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Vanguard Pacific Stock or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Emerging Asia vs. Vanguard Pacific Stock
Performance |
| Timeline |
| Fidelity Emerging Asia |
| Vanguard Pacific Stock |
Fidelity Emerging and Vanguard Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Vanguard Pacific
The main advantage of trading using opposite Fidelity Emerging and Vanguard Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging position performs unexpectedly, Vanguard Pacific 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 Pacific will offset losses from the drop in Vanguard Pacific's long position.| Fidelity Emerging vs. Fidelity China Region | Fidelity Emerging vs. Fidelity Emerging Markets | Fidelity Emerging vs. Fidelity Canada Fund | Fidelity Emerging vs. Fidelity Pacific Basin |
| Vanguard Pacific vs. Pace High Yield | Vanguard Pacific vs. Multisector Bond Sma | Vanguard Pacific vs. Versatile Bond Portfolio | Vanguard Pacific vs. Touchstone Premium 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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