Correlation Between Fidelity Freedom and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom 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 Fidelity Freedom and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Index and Fidelity Freedom Blend, you can compare the effects of market volatilities on Fidelity Freedom 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 Fidelity Freedom with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Freedom.
Diversification Opportunities for Fidelity Freedom and Fidelity Freedom
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Fidelity Freedom 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 Fidelity Freedom Index 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 Blend has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Freedom
Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 1.01 times more return on investment than Fidelity Freedom. However, Fidelity Freedom is 1.01 times more volatile than Fidelity Freedom Blend. It trades about -0.01 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about -0.03 per unit of risk. If you would invest 2,669 in Fidelity Freedom Index on September 25, 2024 and sell it today you would lose (14.00) from holding Fidelity Freedom Index or give up 0.52% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Fidelity Freedom Index vs. Fidelity Freedom Blend
Performance |
Timeline |
Fidelity Freedom Index |
Fidelity Freedom Blend |
Fidelity Freedom and Fidelity Freedom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Freedom and Fidelity Freedom
The main advantage of trading using opposite Fidelity Freedom and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom 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.Fidelity Freedom vs. Fidelity Freedom 2050 | Fidelity Freedom vs. Fidelity Freedom 2005 | Fidelity Freedom vs. Fidelity Freedom 2035 | Fidelity Freedom vs. Fidelity Freedom 2015 |
Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |