Correlation Between Barings Emerging and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Barings Emerging 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 Barings Emerging and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Fidelity Freedom Index, you can compare the effects of market volatilities on Barings Emerging 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 Barings Emerging with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Fidelity Freedom.
Diversification Opportunities for Barings Emerging and Fidelity Freedom
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Barings Emerging 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 Barings Emerging Markets 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 Index has no effect on the direction of Barings Emerging i.e., Barings Emerging and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Barings Emerging and Fidelity Freedom
Assuming the 90 days horizon Barings Emerging is expected to generate 1.76 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Barings Emerging Markets is 1.14 times less risky than Fidelity Freedom. It trades about 0.08 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Fidelity Freedom Index on September 3, 2024 and sell it today you would earn a total of 93.00 from holding Fidelity Freedom Index or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Fidelity Freedom Index
Performance |
| Timeline |
| Barings Emerging Markets |
| Fidelity Freedom Index |
Barings Emerging and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Fidelity Freedom
The main advantage of trading using opposite Barings Emerging and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging 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.| Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Ab Small Cap | Barings Emerging vs. Oklahoma College Savings | Barings Emerging vs. Champlain Small |
| Fidelity Freedom vs. California Bond Fund | Fidelity Freedom vs. Rationalpier 88 Convertible | Fidelity Freedom vs. Touchstone Premium Yield | Fidelity Freedom vs. Multisector Bond Sma |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |