Correlation Between The National and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both The National 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 The National and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The National Tax Free and Fidelity Freedom 2025, you can compare the effects of market volatilities on The National 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 The National with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of The National and Fidelity Freedom.
Diversification Opportunities for The National and Fidelity Freedom
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between The and Fidelity is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and Fidelity Freedom 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2025 and The National 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 The National Tax Free 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 2025 has no effect on the direction of The National i.e., The National and Fidelity Freedom go up and down completely randomly.
Pair Corralation between The National and Fidelity Freedom
Assuming the 90 days horizon The National Tax Free is expected to under-perform the Fidelity Freedom. But the mutual fund apears to be less risky and, when comparing its historical volatility, The National Tax Free is 1.8 times less risky than Fidelity Freedom. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Fidelity Freedom 2025 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,440 in Fidelity Freedom 2025 on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Fidelity Freedom 2025 or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The National Tax Free vs. Fidelity Freedom 2025
Performance |
| Timeline |
| National Tax |
| Fidelity Freedom 2025 |
The National and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The National and Fidelity Freedom
The main advantage of trading using opposite The National and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National 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 National vs. The Missouri Tax Free | The National vs. The Bond Fund | The National vs. High Yield Municipal Fund | The National vs. Fidelity Intermediate Municipal |
| Fidelity Freedom vs. Science Technology Fund | Fidelity Freedom vs. Towpath Technology | Fidelity Freedom vs. Fidelity Advisor Technology | Fidelity Freedom vs. Vanguard Information Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |