Correlation Between Vanguard FTSE and Fidelity Canadian
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and Fidelity Canadian 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 Vanguard FTSE and Fidelity Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Canada and Fidelity Canadian Value, you can compare the effects of market volatilities on Vanguard FTSE and Fidelity Canadian 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 Vanguard FTSE with a short position of Fidelity Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Fidelity Canadian.
Diversification Opportunities for Vanguard FTSE and Fidelity Canadian
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Canada and Fidelity Canadian Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Canadian Value and Vanguard FTSE 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 Vanguard FTSE Canada are associated (or correlated) with Fidelity Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Canadian Value has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Fidelity Canadian go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Fidelity Canadian
Assuming the 90 days trading horizon Vanguard FTSE Canada is expected to generate 0.88 times more return on investment than Fidelity Canadian. However, Vanguard FTSE Canada is 1.13 times less risky than Fidelity Canadian. It trades about 0.1 of its potential returns per unit of risk. Fidelity Canadian Value is currently generating about 0.07 per unit of risk. If you would invest 3,816 in Vanguard FTSE Canada on August 29, 2024 and sell it today you would earn a total of 1,413 from holding Vanguard FTSE Canada or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Canada vs. Fidelity Canadian Value
Performance |
| Timeline |
| Vanguard FTSE Canada |
| Fidelity Canadian Value |
Vanguard FTSE and Fidelity Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Fidelity Canadian
The main advantage of trading using opposite Vanguard FTSE and Fidelity Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, Fidelity Canadian 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 Fidelity Canadian will offset losses from the drop in Fidelity Canadian's long position.| Vanguard FTSE vs. iShares SPTSX 60 | Vanguard FTSE vs. iShares Core SPTSX | Vanguard FTSE vs. BMO SPTSX Capped | Vanguard FTSE vs. Global X SPTSX |
| Fidelity Canadian vs. iShares SPTSX 60 | Fidelity Canadian vs. iShares Core SPTSX | Fidelity Canadian vs. BMO SPTSX Capped | Fidelity Canadian vs. Vanguard FTSE Canada |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |