Correlation Between Vanguard FTSE and Fidelity Crypto

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

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

Diversification Opportunities for Vanguard FTSE and Fidelity Crypto

-0.71

Correlation Coefficient

Vanguard FTSE  Fidelity Crypto

Pay attention - limited upside

The 3 months correlation between Vanguard and Fidelity is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Fidelity Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Crypto Industry and Vanguard FTSE 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 FTSE Developed are associated (or correlated) with Fidelity Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Crypto Industry has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Fidelity Crypto go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Fidelity Crypto

Considering the 90-day investment horizon Vanguard FTSE Developed is expected to generate 0.27 times more return on investment than Fidelity Crypto. However, Vanguard FTSE Developed is 3.68 times less risky than Fidelity Crypto. It trades about 0.14 of its potential returns per unit of risk. Fidelity Crypto Industry is currently generating about -0.13 per unit of risk. If you would invest  4,759  in Vanguard FTSE Developed on December 29, 2024 and sell it today you would earn a total of  365.00  from holding Vanguard FTSE Developed or generate 7.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Vanguard FTSE Developed  vs.  Fidelity Crypto Industry

Vanguard FTSE Developed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fidelity Crypto Industry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Crypto Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Pair Trading with Vanguard FTSE and Fidelity Crypto

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

The idea behind Vanguard FTSE Developed and Fidelity Crypto Industry 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.