Correlation Between First Eagle and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and Fidelity Freedom Blend, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Fidelity Freedom.
Diversification Opportunities for First Eagle and Fidelity Freedom
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Fidelity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold 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 First Eagle 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 First Eagle Gold 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 First Eagle i.e., First Eagle and Fidelity Freedom go up and down completely randomly.
Pair Corralation between First Eagle and Fidelity Freedom
Assuming the 90 days horizon First Eagle Gold is expected to generate 1.64 times more return on investment than Fidelity Freedom. However, First Eagle is 1.64 times more volatile than Fidelity Freedom Blend. It trades about 0.28 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.02 per unit of risk. If you would invest 2,372 in First Eagle Gold on December 12, 2024 and sell it today you would earn a total of 420.00 from holding First Eagle Gold or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Fidelity Freedom Blend
Performance |
| Timeline |
| First Eagle Gold |
| Fidelity Freedom Blend |
First Eagle and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Fidelity Freedom
The main advantage of trading using opposite First Eagle and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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.| First Eagle vs. First Eagle Gold | ||
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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