Correlation Between Vanguard Industrials and Fidelity Metaverse
Can any of the company-specific risk be diversified away by investing in both Vanguard Industrials and Fidelity Metaverse 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 Industrials and Fidelity Metaverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Industrials Index and Fidelity Metaverse ETF, you can compare the effects of market volatilities on Vanguard Industrials and Fidelity Metaverse 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 Industrials with a short position of Fidelity Metaverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Industrials and Fidelity Metaverse.
Diversification Opportunities for Vanguard Industrials and Fidelity Metaverse
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Industrials Index and Fidelity Metaverse ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Metaverse ETF and Vanguard Industrials 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 Industrials Index are associated (or correlated) with Fidelity Metaverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Metaverse ETF has no effect on the direction of Vanguard Industrials i.e., Vanguard Industrials and Fidelity Metaverse go up and down completely randomly.
Pair Corralation between Vanguard Industrials and Fidelity Metaverse
Considering the 90-day investment horizon Vanguard Industrials Index is expected to generate 0.96 times more return on investment than Fidelity Metaverse. However, Vanguard Industrials Index is 1.04 times less risky than Fidelity Metaverse. It trades about 0.24 of its potential returns per unit of risk. Fidelity Metaverse ETF is currently generating about -0.02 per unit of risk. If you would invest 26,089 in Vanguard Industrials Index on August 30, 2024 and sell it today you would earn a total of 1,717 from holding Vanguard Industrials Index or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Industrials Index vs. Fidelity Metaverse ETF
Performance |
| Timeline |
| Vanguard Industrials |
| Fidelity Metaverse ETF |
Vanguard Industrials and Fidelity Metaverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Industrials and Fidelity Metaverse
The main advantage of trading using opposite Vanguard Industrials and Fidelity Metaverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Industrials position performs unexpectedly, Fidelity Metaverse 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 Metaverse will offset losses from the drop in Fidelity Metaverse's long position.The idea behind Vanguard Industrials Index and Fidelity Metaverse ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Fidelity Metaverse vs. Fidelity Crypto Industry | Fidelity Metaverse vs. Fidelity Covington Trust | Fidelity Metaverse vs. ProShares Metaverse ETF | Fidelity Metaverse vs. Fidelity Covington Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |