Correlation Between Vulcan Value and Fidelity High

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

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

Diversification Opportunities for Vulcan Value and Fidelity High

0.93

Correlation Coefficient

Vulcan Value  Fidelity High

Almost no diversification

The 3 months correlation between Vulcan and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Value Partners and Fidelity High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity High Dividend and Vulcan 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 Vulcan Value Partners are associated (or correlated) with Fidelity High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity High Dividend has no effect on the direction of Vulcan Value i.e., Vulcan Value and Fidelity High go up and down completely randomly.

Pair Corralation between Vulcan Value and Fidelity High

Assuming the 90 days horizon Vulcan Value is expected to generate 1.3 times less return on investment than Fidelity High. In addition to that, Vulcan Value is 1.79 times more volatile than Fidelity High Dividend. It trades about 0.11 of its total potential returns per unit of risk. Fidelity High Dividend is currently generating about 0.25 per unit of volatility. If you would invest  4,811  in Fidelity High Dividend on May 4, 2025 and sell it today you would earn a total of  495.00  from holding Fidelity High Dividend or generate 10.29% return on investment over 90 days.

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

Vulcan Value Partners  vs.  Fidelity High Dividend

Vulcan Value Partners

Risk-Adjusted Performance

OK

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

Fidelity High Dividend

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Dividend are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Fidelity High may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Vulcan Value and Fidelity High

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

The idea behind Vulcan Value Partners and Fidelity High Dividend 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 Stocks Directory module to find actively traded stocks across global markets.