Correlation Between Vanguard Mid-cap and Fidelity Low-priced
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid-cap and Fidelity Low-priced 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 Mid-cap and Fidelity Low-priced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Value and Fidelity Low Priced Stock, you can compare the effects of market volatilities on Vanguard Mid-cap and Fidelity Low-priced 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 Mid-cap with a short position of Fidelity Low-priced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid-cap and Fidelity Low-priced.
Diversification Opportunities for Vanguard Mid-cap and Fidelity Low-priced
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Value and Fidelity Low Priced Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Low Priced and Vanguard 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 Vanguard Mid Cap Value are associated (or correlated) with Fidelity Low-priced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Low Priced has no effect on the direction of Vanguard Mid-cap i.e., Vanguard Mid-cap and Fidelity Low-priced go up and down completely randomly.
Pair Corralation between Vanguard Mid-cap and Fidelity Low-priced
Assuming the 90 days horizon Vanguard Mid-cap is expected to generate 1.16 times less return on investment than Fidelity Low-priced. In addition to that, Vanguard Mid-cap is 1.08 times more volatile than Fidelity Low Priced Stock. It trades about 0.11 of its total potential returns per unit of risk. Fidelity Low Priced Stock is currently generating about 0.14 per unit of volatility. If you would invest 4,385 in Fidelity Low Priced Stock on January 26, 2024 and sell it today you would earn a total of 266.00 from holding Fidelity Low Priced Stock or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Value vs. Fidelity Low Priced Stock
Performance |
| Timeline |
| Vanguard Mid Cap |
| Fidelity Low Priced |
Vanguard Mid-cap and Fidelity Low-priced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid-cap and Fidelity Low-priced
The main advantage of trading using opposite Vanguard Mid-cap and Fidelity Low-priced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid-cap position performs unexpectedly, Fidelity Low-priced 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 Low-priced will offset losses from the drop in Fidelity Low-priced's long position.| Vanguard Mid-cap vs. Fidelity Low Priced Stock | Vanguard Mid-cap vs. Fidelity Low Priced Stock | Vanguard Mid-cap vs. Vanguard Mid Cap Value | Vanguard Mid-cap vs. John Hancock Disciplined |
| Fidelity Low-priced vs. Clipper Fund Inc | Fidelity Low-priced vs. Blackrock Value Opps | Fidelity Low-priced vs. Third Avenue Value |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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