Correlation Between Vanguard and Fidelity Greater

Can any of the company-specific risk be diversified away by investing in both Vanguard and Fidelity Greater 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 and Fidelity Greater into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard SP 500 and Fidelity Greater Canada, you can compare the effects of market volatilities on Vanguard and Fidelity Greater 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 with a short position of Fidelity Greater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and Fidelity Greater.

Diversification Opportunities for Vanguard and Fidelity Greater

0.99

Correlation Coefficient

Vanguard  Fidelity Greater

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 SP 500 and Fidelity Greater Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Greater Canada and Vanguard 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 SP 500 are associated (or correlated) with Fidelity Greater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Greater Canada has no effect on the direction of Vanguard i.e., Vanguard and Fidelity Greater go up and down completely randomly.

Pair Corralation between Vanguard and Fidelity Greater

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.97 times more return on investment than Fidelity Greater. However, Vanguard SP 500 is 1.03 times less risky than Fidelity Greater. It trades about 0.35 of its potential returns per unit of risk. Fidelity Greater Canada is currently generating about 0.27 per unit of risk. If you would invest  14,564  in Vanguard SP 500 on April 10, 2025 and sell it today you would earn a total of  633.00  from holding Vanguard SP 500 or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Vanguard SP 500  vs.  Fidelity Greater Canada

Vanguard SP 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard SP 500 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vanguard displayed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Greater Canada

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Greater Canada are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Fidelity Greater exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard and Fidelity Greater

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

The idea behind Vanguard SP 500 and Fidelity Greater Canada 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.