Voo vs VTI and fcntx correlation?

**VOO** and **FCNTX** exhibit high correlation due to their similar investment objectives and sector allocations, while **VTI** (Vanguard Total Stock Market ETF) shows a slightly lower correlation due to its broader market coverage. 1. **Correlation Between VOO and FCNTX**: - The correlation coefficient between VOO and FCNTX is approximately **0.93**. This indicates a strong positive relationship between their price movements, suggesting that they tend to move together in the market. - Both funds track the S&P 500 Index closely and have similar sector weightings, which contributes to their high correlation. 2. **Correlation Between VTI and FCNTX**: - The correlation coefficient between VTI and FCNTX is slightly lower at approximately **0.90**. This suggests a strong positive relationship, but less so than between VOO and FCNTX. - VTI's broader market coverage, which includes small-cap and international stocks, reduces its correlation with FCNTX, which focuses primarily on large-cap U.S. stocks. 3. **Implications for Portfolio Construction**: - High correlation between VOO and FCNTX means that adding both to a portfolio may not significantly enhance diversification. Investors should consider the potential risks of having a large portion of their portfolio in funds that are highly correlated. - VTI's lower correlation with FCNTX makes it a more attractive addition to a portfolio seeking broader market exposure, as it can help reduce concentration risk. In summary, while all three funds are correlated due to their S&P 500 Index tracking, VTI's correlation is slightly lower due to its broader market coverage, making it a more diversifying addition to a portfolio.