Correlation Between Vanguard Small and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Vanguard Small and Fidelity International 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 Small and Fidelity International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Value and Fidelity International Real, you can compare the effects of market volatilities on Vanguard Small and Fidelity International 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 Small with a short position of Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Fidelity International.
Diversification Opportunities for Vanguard Small and Fidelity International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Fidelity is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Value and Fidelity International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International and Vanguard Small 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 Small Cap Value are associated (or correlated) with Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Vanguard Small i.e., Vanguard Small and Fidelity International go up and down completely randomly.
Pair Corralation between Vanguard Small and Fidelity International
Assuming the 90 days horizon Vanguard Small Cap Value is expected to generate 1.4 times more return on investment than Fidelity International. However, Vanguard Small is 1.4 times more volatile than Fidelity International Real. It trades about 0.05 of its potential returns per unit of risk. Fidelity International Real is currently generating about -0.02 per unit of risk. If you would invest 4,001 in Vanguard Small Cap Value on November 2, 2024 and sell it today you would earn a total of 969.00 from holding Vanguard Small Cap Value or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Small Cap Value vs. Fidelity International Real
Performance |
| Timeline |
| Vanguard Small Cap |
| Fidelity International |
Vanguard Small and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Small and Fidelity International
The main advantage of trading using opposite Vanguard Small and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small position performs unexpectedly, Fidelity International 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 International will offset losses from the drop in Fidelity International's long position.| Vanguard Small vs. Oppenheimer Gold Special | Vanguard Small vs. Global Gold Fund | Vanguard Small vs. World Precious Minerals | Vanguard Small vs. Vy Goldman Sachs |
| Fidelity International vs. Vanguard Developed Markets | Fidelity International vs. Franklin Emerging Market | Fidelity International vs. Aqr Equity Market | Fidelity International vs. Old Westbury Short Term |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |