Correlation Between Vanguard Total and Fidelity Advisor

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Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Fidelity Advisor 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 Total and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Fidelity Advisor Balanced, you can compare the effects of market volatilities on Vanguard Total and Fidelity Advisor 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 Total with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Fidelity Advisor.

Diversification Opportunities for Vanguard Total and Fidelity Advisor

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vanguard and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Fidelity Advisor Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Balanced and Vanguard Total 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 Total Stock are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Balanced has no effect on the direction of Vanguard Total i.e., Vanguard Total and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Vanguard Total and Fidelity Advisor

If you would invest  9,477  in Vanguard Total Stock on September 8, 2024 and sell it today you would earn a total of  5,249  from holding Vanguard Total Stock or generate 55.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.21%
ValuesDaily Returns

Vanguard Total Stock  vs.  Fidelity Advisor Balanced

 Performance 
       Timeline  
Vanguard Total Stock 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total Stock are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Total may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Fidelity Advisor Balanced 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Fidelity Advisor Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Total and Fidelity Advisor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Total and Fidelity Advisor

The main advantage of trading using opposite Vanguard Total and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.
The idea behind Vanguard Total Stock and Fidelity Advisor Balanced 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.
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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