Correlation Between Fidelity Arizona and Vanguard Growth

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

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

Diversification Opportunities for Fidelity Arizona and Vanguard Growth

0.0

Correlation Coefficient

Fidelity Arizona  Vanguard Growth

Pay attention - limited upside

The 3 months correlation between Fidelity and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Arizona Municipal and Vanguard Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth And and Fidelity Arizona 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 Arizona Municipal are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth And has no effect on the direction of Fidelity Arizona i.e., Fidelity Arizona and Vanguard Growth go up and down completely randomly.

Pair Corralation between Fidelity Arizona and Vanguard Growth

Assuming the 90 days horizon Fidelity Arizona Municipal is expected to generate 0.19 times more return on investment than Vanguard Growth. However, Fidelity Arizona Municipal is 5.35 times less risky than Vanguard Growth. It trades about -0.03 of its potential returns per unit of risk. Vanguard Growth And is currently generating about -0.09 per unit of risk. If you would invest  1,136  in Fidelity Arizona Municipal on December 30, 2024 and sell it today you would lose (5.00) from holding Fidelity Arizona Municipal or give up 0.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fidelity Arizona Municipal  vs.  Vanguard Growth And

Fidelity Arizona Mun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Arizona Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Arizona is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Growth And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Growth 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 Arizona and Vanguard Growth

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

The idea behind Fidelity Arizona Municipal and Vanguard Growth And 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.

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 the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.