Correlation Between Vanguard Extended and Fidelity Extended
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended and Fidelity Extended 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 Extended 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 Extended Market, you can compare the effects of market volatilities on Vanguard Extended and Fidelity Extended 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 Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Fidelity Extended.
Diversification Opportunities for Vanguard Extended and Fidelity Extended
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market and Fidelity Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Extended Market 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 Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Extended Market has no effect on the direction of Vanguard Extended i.e., Vanguard Extended and Fidelity Extended go up and down completely randomly.
Pair Corralation between Vanguard Extended and Fidelity Extended
Assuming the 90 days horizon Vanguard Extended Market is expected to under-perform the Fidelity Extended. In addition to that, Vanguard Extended is 1.0 times more volatile than Fidelity Extended Market. It trades about -0.21 of its total potential returns per unit of risk. Fidelity Extended Market is currently generating about -0.21 per unit of volatility. If you would invest 9,449 in Fidelity Extended Market on November 27, 2024 and sell it today you would lose (403.00) from holding Fidelity Extended Market or give up 4.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Market vs. Fidelity Extended Market
Performance |
| Timeline |
| Vanguard Extended Market |
| Fidelity Extended Market |
Vanguard Extended and Fidelity Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Fidelity Extended
The main advantage of trading using opposite Vanguard Extended and Fidelity Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended position performs unexpectedly, Fidelity Extended 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 Extended will offset losses from the drop in Fidelity Extended's long position.| Vanguard Extended vs. Columbia Moderate Growth | Vanguard Extended vs. Wealthbuilder Moderate Balanced | Vanguard Extended vs. Blackrock Retirement Income | Vanguard Extended vs. Tiaa Cref Lifestyle Moderate |
| Fidelity Extended vs. Fidelity International Index | Fidelity Extended vs. Fidelity 500 Index | Fidelity Extended vs. Fidelity Bond Index | Fidelity Extended vs. Fidelity Total Market |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| 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 | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |