Correlation Between Fidelity Mid-cap and Vanguard Mid-cap
Can any of the company-specific risk be diversified away by investing in both Fidelity Mid-cap and Vanguard Mid-cap 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 Fidelity Mid-cap and Vanguard Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Mid Cap Stock and Vanguard Mid Cap Index, you can compare the effects of market volatilities on Fidelity Mid-cap and Vanguard Mid-cap 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 Fidelity Mid-cap with a short position of Vanguard Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Mid-cap and Vanguard Mid-cap.
Diversification Opportunities for Fidelity Mid-cap and Vanguard Mid-cap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Mid Cap Stock and Vanguard Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap and Fidelity Mid-cap 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 Fidelity Mid Cap Stock are associated (or correlated) with Vanguard Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Fidelity Mid-cap i.e., Fidelity Mid-cap and Vanguard Mid-cap go up and down completely randomly.
Pair Corralation between Fidelity Mid-cap and Vanguard Mid-cap
Assuming the 90 days horizon Fidelity Mid-cap is expected to generate 1.17 times less return on investment than Vanguard Mid-cap. In addition to that, Fidelity Mid-cap is 1.09 times more volatile than Vanguard Mid Cap Index. It trades about 0.06 of its total potential returns per unit of risk. Vanguard Mid Cap Index is currently generating about 0.08 per unit of volatility. If you would invest 5,629 in Vanguard Mid Cap Index on January 25, 2024 and sell it today you would earn a total of 916.00 from holding Vanguard Mid Cap Index or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Mid Cap Stock vs. Vanguard Mid Cap Index
Performance |
| Timeline |
| Fidelity Mid Cap |
| Vanguard Mid Cap |
Fidelity Mid-cap and Vanguard Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Mid-cap and Vanguard Mid-cap
The main advantage of trading using opposite Fidelity Mid-cap and Vanguard Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Mid-cap position performs unexpectedly, Vanguard Mid-cap 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 Vanguard Mid-cap will offset losses from the drop in Vanguard Mid-cap's long position.| Fidelity Mid-cap vs. Fidelity Freedom 2015 | Fidelity Mid-cap vs. Fidelity Puritan Fund | Fidelity Mid-cap vs. Fidelity Puritan Fund | Fidelity Mid-cap vs. Fidelity Pennsylvania Municipal |
| Vanguard Mid-cap vs. Vanguard Materials Index | Vanguard Mid-cap vs. Vanguard Limited Term Tax Exempt | Vanguard Mid-cap vs. Vanguard Limited Term Tax Exempt | Vanguard Mid-cap vs. Vanguard Global Minimum |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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