Correlation Between M Large and Fidelity Freedom

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

By analyzing existing cross correlation between M Large Cap and Fidelity Freedom 2005, you can compare the effects of market volatilities on M Large 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 M Large with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Large and Fidelity Freedom.

Diversification Opportunities for M Large and Fidelity Freedom

0.0

Correlation Coefficient

M Large  Fidelity Freedom

Pay attention - limited upside

The 3 months correlation between MTCGX and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding M Large Cap and Fidelity Freedom 2005 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2005 and M Large 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 M Large Cap 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 2005 has no effect on the direction of M Large i.e., M Large and Fidelity Freedom go up and down completely randomly.

Pair Corralation between M Large and Fidelity Freedom

If you would invest  3,471  in M Large Cap on September 16, 2024 and sell it today you would earn a total of  262.00  from holding M Large Cap or generate 7.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

M Large Cap  vs.  Fidelity Freedom 2005

M Large Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in M Large Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, M Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Freedom 2005

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Freedom 2005 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with M Large and Fidelity Freedom

The main advantage of trading using opposite M Large and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Large 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.

The idea behind M Large Cap and Fidelity Freedom 2005 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.