Correlation Between Fidelity Freedom and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Old Westbury 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 Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Blend and Old Westbury Small, you can compare the effects of market volatilities on Fidelity Freedom and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Old Westbury.
Diversification Opportunities for Fidelity Freedom and Old Westbury
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Old is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Old Westbury Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Small 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 Blend are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Small has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Old Westbury go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Old Westbury
Assuming the 90 days horizon Fidelity Freedom is expected to generate 4.21 times less return on investment than Old Westbury. But when comparing it to its historical volatility, Fidelity Freedom Blend is 1.3 times less risky than Old Westbury. It trades about 0.05 of its potential returns per unit of risk. Old Westbury Small is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,687 in Old Westbury Small on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Old Westbury Small or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Old Westbury Small
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Old Westbury Small |
Fidelity Freedom and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Old Westbury
The main advantage of trading using opposite Fidelity Freedom and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Fidelity Freedom vs. Fidelity Freedom 2015 | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Pennsylvania Municipal |
| Old Westbury vs. Aqr Large Cap | Old Westbury vs. Tax Managed Large Cap | Old Westbury vs. Touchstone Large Cap | Old Westbury vs. Federated Mdt Large |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance |