Correlation Between Fidelity Select and Vanguard Energy
Can any of the company-specific risk be diversified away by investing in both Fidelity Select and Vanguard Energy 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 Select and Vanguard Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Select Portfolios and Vanguard Energy Fund, you can compare the effects of market volatilities on Fidelity Select and Vanguard Energy 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 Select with a short position of Vanguard Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Select and Vanguard Energy.
Diversification Opportunities for Fidelity Select and Vanguard Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Vanguard is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Select Portfolios and Vanguard Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Energy and Fidelity Select 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 Select Portfolios are associated (or correlated) with Vanguard Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Energy has no effect on the direction of Fidelity Select i.e., Fidelity Select and Vanguard Energy go up and down completely randomly.
Pair Corralation between Fidelity Select and Vanguard Energy
Assuming the 90 days horizon Fidelity Select Portfolios is expected to generate 1.34 times more return on investment than Vanguard Energy. However, Fidelity Select is 1.34 times more volatile than Vanguard Energy Fund. It trades about 0.03 of its potential returns per unit of risk. Vanguard Energy Fund is currently generating about 0.02 per unit of risk. If you would invest 5,350 in Fidelity Select Portfolios on October 25, 2024 and sell it today you would earn a total of 757.00 from holding Fidelity Select Portfolios or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fidelity Select Portfolios vs. Vanguard Energy Fund
Performance |
| Timeline |
| Fidelity Select Port |
| Vanguard Energy |
Fidelity Select and Vanguard Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Select and Vanguard Energy
The main advantage of trading using opposite Fidelity Select and Vanguard Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Select position performs unexpectedly, Vanguard Energy 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 Energy will offset losses from the drop in Vanguard Energy's long position.| Fidelity Select vs. Fidelity Natural Resources | Fidelity Select vs. Gold Portfolio Gold | Fidelity Select vs. Health Care Services | Fidelity Select vs. Materials Portfolio Materials |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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