Correlation Between Columbia Small and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Columbia Small 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 Columbia Small and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Small Cap and Fidelity Freedom 2035, you can compare the effects of market volatilities on Columbia Small 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 Columbia Small with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Small and Fidelity Freedom.
Diversification Opportunities for Columbia Small and Fidelity Freedom
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Columbia and Fidelity is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Small Cap and Fidelity Freedom 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2035 and Columbia Small 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 Columbia Small 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 2035 has no effect on the direction of Columbia Small i.e., Columbia Small and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Columbia Small and Fidelity Freedom
Assuming the 90 days horizon Columbia Small Cap is expected to generate 2.12 times more return on investment than Fidelity Freedom. However, Columbia Small is 2.12 times more volatile than Fidelity Freedom 2035. It trades about 0.04 of its potential returns per unit of risk. Fidelity Freedom 2035 is currently generating about 0.08 per unit of risk. If you would invest 4,638 in Columbia Small Cap on September 3, 2024 and sell it today you would earn a total of 1,154 from holding Columbia Small Cap or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Columbia Small Cap vs. Fidelity Freedom 2035
Performance |
| Timeline |
| Columbia Small Cap |
| Fidelity Freedom 2035 |
Columbia Small and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Small and Fidelity Freedom
The main advantage of trading using opposite Columbia Small and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Small 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.| Columbia Small vs. T Rowe Price | Columbia Small vs. Metropolitan West High | Columbia Small vs. Artisan High Income | Columbia Small vs. Calvert High Yield |
| Fidelity Freedom vs. American Century Etf | Fidelity Freedom vs. Columbia Small Cap | Fidelity Freedom vs. Ultrasmall Cap Profund Ultrasmall Cap | Fidelity Freedom vs. Fpa Queens Road |
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.
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