Correlation Between Vanguard Total and Fidelity Total

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Fidelity Total 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 Total 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 Total Market, you can compare the effects of market volatilities on Vanguard Total and Fidelity Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Fidelity Total.

Diversification Opportunities for Vanguard Total and Fidelity Total

1.0
  Correlation Coefficient

No risk reduction

The 1 month correlation between Vanguard and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Fidelity Total Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Total Market 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Total Market has no effect on the direction of Vanguard Total i.e., Vanguard Total and Fidelity Total go up and down completely randomly.

Pair Corralation between Vanguard Total and Fidelity Total

Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.0 times more return on investment than Fidelity Total. However, Vanguard Total Stock is 1.0 times less risky than Fidelity Total. It trades about -0.17 of its potential returns per unit of risk. Fidelity Total Market is currently generating about -0.17 per unit of risk. If you would invest  18,643  in Vanguard Total Stock on April 2, 2022 and sell it today you would lose (1,272)  from holding Vanguard Total Stock or give up 6.82% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Vanguard Total Stock  vs.  Fidelity Total Market

 Performance (%) 
      Timeline 
Vanguard Total Stock 
Vanguard Performance
0 of 100
Over the last 90 days Vanguard Total Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Vanguard Price Channel

Fidelity Total Market 
Fidelity Performance
0 of 100
Over the last 90 days Fidelity Total Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fidelity Price Channel

Vanguard Total and Fidelity Total Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Vanguard Total and Fidelity Total

The main advantage of trading using opposite Vanguard Total and Fidelity Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Fidelity Total 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 Total will offset losses from the drop in Fidelity Total's long position.

Vanguard Total Stock

Pair trading matchups for Vanguard Total

The idea behind Vanguard Total Stock and Fidelity Total Market 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.

Fidelity Total Market

Pair trading matchups for Fidelity Total

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go