Correlation Between Vanguard Extended and Fidelity Mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Fidelity Mid 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 Extended and Fidelity Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Extended Market and Fidelity Mid Cap, you can compare the effects of market volatilities on Vanguard Extended and Fidelity Mid 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 Extended with a short position of Fidelity Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Fidelity Mid.
Diversification Opportunities for Vanguard Extended and Fidelity Mid
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Fidelity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Fidelity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Mid Cap and Vanguard Extended 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 Extended Market are associated (or correlated) with Fidelity Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Mid Cap has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Fidelity Mid go up and down completely randomly.
Pair Corralation between Vanguard Extended and Fidelity Mid
If you would invest 34,270 in Vanguard Extended Market on September 1, 2024 and sell it today you would earn a total of 4,097 from holding Vanguard Extended Market or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Vanguard Extended Market vs. Fidelity Mid Cap
Performance |
| Timeline |
| Vanguard Extended Market |
| Fidelity Mid Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Extended and Fidelity Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Fidelity Mid
The main advantage of trading using opposite Vanguard Extended and Fidelity Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Fidelity Mid 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 Mid will offset losses from the drop in Fidelity Mid's long position.| Vanguard Extended vs. Angel Oak Financial | Vanguard Extended vs. Mesirow Financial Small | Vanguard Extended vs. Goldman Sachs Financial | Vanguard Extended vs. Financials Ultrasector Profund |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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