Correlation Between Vanguard Growth and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth and Fidelity Contrafund 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 Growth and Fidelity Contrafund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and Fidelity Contrafund K6, you can compare the effects of market volatilities on Vanguard Growth and Fidelity Contrafund 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 Growth with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Fidelity Contrafund.
Diversification Opportunities for Vanguard Growth and Fidelity Contrafund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index and Fidelity Contrafund K6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund and Vanguard Growth 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 Growth Index are associated (or correlated) with Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Vanguard Growth i.e., Vanguard Growth and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Vanguard Growth and Fidelity Contrafund
If you would invest (100.00) in Vanguard Growth Index on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Vanguard Growth Index or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Fidelity Contrafund K6
Performance |
| Timeline |
| Vanguard Growth Index |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Fidelity Contrafund |
Vanguard Growth and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Fidelity Contrafund
The main advantage of trading using opposite Vanguard Growth and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth position performs unexpectedly, Fidelity Contrafund 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 Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Vanguard Growth vs. Mutual Of America | Vanguard Growth vs. Hennessy Nerstone Mid | Vanguard Growth vs. American Century Etf | Vanguard Growth vs. Prudential Jennison Mid Cap |
| Fidelity Contrafund vs. Fidelity Advisor International | Fidelity Contrafund vs. Lord Abbett Growth | Fidelity Contrafund vs. Delaware Smid Cap | Fidelity Contrafund vs. Fidelity Advisor Series |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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