Correlation Between Fidelity Freedom and Great-west Lifetime
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Great-west Lifetime 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 Fidelity Freedom and Great-west Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Index and Great West Lifetime 2060, you can compare the effects of market volatilities on Fidelity Freedom and Great-west Lifetime 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 Fidelity Freedom with a short position of Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Great-west Lifetime.
Diversification Opportunities for Fidelity Freedom and Great-west Lifetime
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Great-west is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Great West Lifetime 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime and Fidelity Freedom 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 Fidelity Freedom Index are associated (or correlated) with Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Great-west Lifetime go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Great-west Lifetime
Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 0.94 times more return on investment than Great-west Lifetime. However, Fidelity Freedom Index is 1.06 times less risky than Great-west Lifetime. It trades about 0.28 of its potential returns per unit of risk. Great West Lifetime 2060 is currently generating about 0.23 per unit of risk. If you would invest 1,841 in Fidelity Freedom Index on September 3, 2024 and sell it today you would earn a total of 59.00 from holding Fidelity Freedom Index or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Great West Lifetime 2060
Performance |
| Timeline |
| Fidelity Freedom Index |
| Great West Lifetime |
Fidelity Freedom and Great-west Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Great-west Lifetime
The main advantage of trading using opposite Fidelity Freedom and Great-west Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Great-west Lifetime 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 Great-west Lifetime will offset losses from the drop in Great-west Lifetime's long position.| Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index |
| Great-west Lifetime vs. Needham Aggressive Growth | Great-west Lifetime vs. Pioneer High Yield | Great-west Lifetime vs. Ab High Income | Great-west Lifetime vs. Nuveen High Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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