Correlation Between Ab Select and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Fidelity Freedom Blend, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Fidelity Freedom.
Diversification Opportunities for Ab Select and Fidelity Freedom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASCLX and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort 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 Ab Select 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 Ab Select Longshort 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 Ab Select i.e., Ab Select and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Ab Select and Fidelity Freedom
Assuming the 90 days horizon Ab Select Longshort is expected to generate 0.98 times more return on investment than Fidelity Freedom. However, Ab Select Longshort is 1.02 times less risky than Fidelity Freedom. It trades about 0.35 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.29 per unit of risk. If you would invest 1,353 in Ab Select Longshort on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Ab Select Longshort or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Ab Select Longshort |
| Fidelity Freedom Blend |
Ab Select and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Fidelity Freedom
The main advantage of trading using opposite Ab Select and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Pace International Emerging | Ab Select vs. Goldman Sachs Emerging | Ab Select vs. Barings Emerging Markets | Ab Select vs. Artisan Emerging Markets |
| Fidelity Freedom vs. Calamos Dynamic Convertible | Fidelity Freedom vs. Harbor Vertible Securities | Fidelity Freedom vs. Allianzgi Convertible Income | Fidelity Freedom vs. Gabelli Convertible And |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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