Correlation Between Fidelity Growth and Vanguard Russell

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

By analyzing existing cross correlation between Fidelity Growth Opportunities and Vanguard Russell 1000, you can compare the effects of market volatilities on Fidelity Growth and Vanguard Russell 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 Growth with a short position of Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Growth and Vanguard Russell.

Diversification Opportunities for Fidelity Growth and Vanguard Russell

0.85

Correlation Coefficient

Fidelity Growth  Vanguard Russell

Very poor diversification

The 3 months correlation between Fidelity and Vanguard is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Growth Opportunities and Vanguard Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 1000 and Fidelity Growth 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 Growth Opportunities are associated (or correlated) with Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 1000 has no effect on the direction of Fidelity Growth i.e., Fidelity Growth and Vanguard Russell go up and down completely randomly.

Pair Corralation between Fidelity Growth and Vanguard Russell

Given the investment horizon of 90 days Fidelity Growth is expected to generate 1.02 times less return on investment than Vanguard Russell. In addition to that, Fidelity Growth is 1.03 times more volatile than Vanguard Russell 1000. It trades about 0.12 of its total potential returns per unit of risk. Vanguard Russell 1000 is currently generating about 0.13 per unit of volatility. If you would invest  9,528  in Vanguard Russell 1000 on October 5, 2024 and sell it today you would earn a total of  786.00  from holding Vanguard Russell 1000 or generate 8.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.72%
Values	Daily Returns

Fidelity Growth Opportunities  vs.  Vanguard Russell 1000

Fidelity Growth Oppo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Growth Opportunities are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Fidelity Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vanguard Russell 1000

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Russell 1000 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vanguard Russell may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fidelity Growth and Vanguard Russell

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

The idea behind Fidelity Growth Opportunities and Vanguard Russell 1000 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.