Correlation Between Vanguard and Fidelity High

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

Diversification Opportunities for Vanguard and Fidelity High

0.96

Correlation Coefficient

Vanguard  Fidelity High

Almost no diversification

The 3 months correlation between Vanguard and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and Fidelity High Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity High Quality 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity High Quality has no effect on the direction of Vanguard i.e., Vanguard and Fidelity High go up and down completely randomly.

Pair Corralation between Vanguard and Fidelity High

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 1.1 times more return on investment than Fidelity High. However, Vanguard is 1.1 times more volatile than Fidelity High Quality. It trades about 0.31 of its potential returns per unit of risk. Fidelity High Quality is currently generating about 0.28 per unit of risk. If you would invest  8,799  in Vanguard SP 500 on April 24, 2025 and sell it today you would earn a total of  1,299  from holding Vanguard SP 500 or generate 14.76% 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 High Quality

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 24 (%) 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 High Quality

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Quality are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vanguard and Fidelity High

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

The idea behind Vanguard SP 500 and Fidelity High Quality 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.