Correlation Between Fidelity Series and Vanguard International

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

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

Diversification Opportunities for Fidelity Series and Vanguard International

0.95

Correlation Coefficient

Fidelity Series  Vanguard International

Almost no diversification

The 3 months correlation between Fidelity and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series International and Vanguard International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard International and Fidelity Series 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 Series International are associated (or correlated) with Vanguard International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard International has no effect on the direction of Fidelity Series i.e., Fidelity Series and Vanguard International go up and down completely randomly.

Pair Corralation between Fidelity Series and Vanguard International

Assuming the 90 days horizon Fidelity Series International is expected to generate 1.04 times more return on investment than Vanguard International. However, Fidelity Series is 1.04 times more volatile than Vanguard International Value. It trades about 0.25 of its potential returns per unit of risk. Vanguard International Value is currently generating about 0.1 per unit of risk. If you would invest  1,192  in Fidelity Series International on December 30, 2024 and sell it today you would earn a total of  182.00  from holding Fidelity Series International or generate 15.27% return on investment over 90 days.

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

Fidelity Series International  vs.  Vanguard International Value

Fidelity Series Inte

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Series International are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Series showed solid returns over the last few months and may actually be approaching a breakup point.

Vanguard International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard International Value are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vanguard International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Series and Vanguard International

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

The idea behind Fidelity Series International and Vanguard International Value 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.