Correlation Between Vanguard Total and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Fidelity Freedom 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 Total and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Fidelity Freedom Index, you can compare the effects of market volatilities on Vanguard Total and Fidelity Freedom 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 Total with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Fidelity Freedom.
Diversification Opportunities for Vanguard Total and Fidelity Freedom
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Vanguard Total 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 Total Stock are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Index has no effect on the direction of Vanguard Total i.e., Vanguard Total and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Vanguard Total and Fidelity Freedom
Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.15 times more return on investment than Fidelity Freedom. However, Vanguard Total is 1.15 times more volatile than Fidelity Freedom Index. It trades about 0.22 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.2 per unit of risk. If you would invest 14,237 in Vanguard Total Stock on June 4, 2025 and sell it today you would earn a total of 1,246 from holding Vanguard Total Stock or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Fidelity Freedom Index
Performance |
| Timeline |
| Vanguard Total Stock |
| Fidelity Freedom Index |
Vanguard Total and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Fidelity Freedom
The main advantage of trading using opposite Vanguard Total and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Fidelity Freedom 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 Freedom will offset losses from the drop in Fidelity Freedom's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard 500 Index | Vanguard Total vs. Vanguard Reit Index |
| Fidelity Freedom vs. Vanguard Target Retirement | Fidelity Freedom vs. American Funds 2065 | Fidelity Freedom vs. American Funds 2065 | Fidelity Freedom vs. American Funds 2065 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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