Correlation Between Vanguard Target and Fidelity Puritan
Can any of the company-specific risk be diversified away by investing in both Vanguard Target and Fidelity Puritan 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 Target and Fidelity Puritan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Target Retirement and Fidelity Puritan Fund, you can compare the effects of market volatilities on Vanguard Target and Fidelity Puritan 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 Target with a short position of Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Fidelity Puritan.
Diversification Opportunities for Vanguard Target and Fidelity Puritan
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Fidelity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan and Vanguard Target 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 Target Retirement are associated (or correlated) with Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Vanguard Target i.e., Vanguard Target and Fidelity Puritan go up and down completely randomly.
Pair Corralation between Vanguard Target and Fidelity Puritan
Assuming the 90 days horizon Vanguard Target is expected to generate 59.69 times less return on investment than Fidelity Puritan. But when comparing it to its historical volatility, Vanguard Target Retirement is 1.36 times less risky than Fidelity Puritan. It trades about 0.0 of its potential returns per unit of risk. Fidelity Puritan Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,492 in Fidelity Puritan Fund on August 30, 2024 and sell it today you would earn a total of 83.00 from holding Fidelity Puritan Fund or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Fidelity Puritan Fund
Performance |
| Timeline |
| Vanguard Target Reti |
| Fidelity Puritan |
Vanguard Target and Fidelity Puritan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Fidelity Puritan
The main advantage of trading using opposite Vanguard Target and Fidelity Puritan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target position performs unexpectedly, Fidelity Puritan 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 Puritan will offset losses from the drop in Fidelity Puritan's long position.| Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
| Fidelity Puritan vs. Fidelity Balanced Fund | Fidelity Puritan vs. Fidelity Magellan Fund | Fidelity Puritan vs. Fidelity Growth Income | Fidelity Puritan vs. Fidelity Equity Income Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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