Correlation Between Vanguard Value and Fidelity MSCI

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

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

Diversification Opportunities for Vanguard Value and Fidelity MSCI

0.92

Correlation Coefficient

Vanguard Value  Fidelity MSCI

Almost no diversification

The 3 months correlation between Vanguard and Fidelity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Factor and Fidelity MSCI Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Commun and Vanguard Value 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 Value Factor are associated (or correlated) with Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Commun has no effect on the direction of Vanguard Value i.e., Vanguard Value and Fidelity MSCI go up and down completely randomly.

Pair Corralation between Vanguard Value and Fidelity MSCI

Given the investment horizon of 90 days Vanguard Value is expected to generate 1.66 times less return on investment than Fidelity MSCI. In addition to that, Vanguard Value is 1.34 times more volatile than Fidelity MSCI Communication. It trades about 0.11 of its total potential returns per unit of risk. Fidelity MSCI Communication is currently generating about 0.23 per unit of volatility. If you would invest  5,704  in Fidelity MSCI Communication on May 6, 2025 and sell it today you would earn a total of  795.00  from holding Fidelity MSCI Communication or generate 13.94% return on investment over 90 days.

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

Vanguard Value Factor  vs.  Fidelity MSCI Communication

Vanguard Value Factor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Value Factor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vanguard Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fidelity MSCI Commun

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity MSCI Communication are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fidelity MSCI displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vanguard Value and Fidelity MSCI

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

The idea behind Vanguard Value Factor and Fidelity MSCI Communication 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.