Correlation Between Dana Large and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Dana 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 Dana 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 Dana Large Cap and Fidelity Freedom Blend, you can compare the effects of market volatilities on Dana 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 Dana Large with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Fidelity Freedom.
Diversification Opportunities for Dana Large and Fidelity Freedom
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dana and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap 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 Dana 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 Dana 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 Blend has no effect on the direction of Dana Large i.e., Dana Large and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Dana Large and Fidelity Freedom
Assuming the 90 days horizon Dana Large Cap is expected to generate 1.13 times more return on investment than Fidelity Freedom. However, Dana Large is 1.13 times more volatile than Fidelity Freedom Blend. It trades about 0.13 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.08 per unit of risk. If you would invest 2,364 in Dana Large Cap on September 1, 2024 and sell it today you would earn a total of 346.00 from holding Dana Large Cap or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Dana Large Cap |
| Fidelity Freedom Blend |
Dana Large and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Fidelity Freedom
The main advantage of trading using opposite Dana Large and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana 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.| Dana Large vs. Dana Small Cap | Dana Large vs. Fidelity Advisor Balanced | Dana Large vs. Fidelity Freedom Index | Dana Large vs. Allspring Global Dividend |
| Fidelity Freedom vs. Qs Large Cap | Fidelity Freedom vs. Aqr Large Cap | Fidelity Freedom vs. Dana Large Cap | Fidelity Freedom vs. Qs Large Cap |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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