Correlation Between Fidelity Freedom and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Performance Trust 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 Performance Trust 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 Performance Trust Strategic, you can compare the effects of market volatilities on Fidelity Freedom and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Performance Trust.
Diversification Opportunities for Fidelity Freedom and Performance Trust
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and PERFORMANCE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Performance Trust go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Performance Trust
Assuming the 90 days horizon Fidelity Freedom Blend is expected to generate 2.14 times more return on investment than Performance Trust. However, Fidelity Freedom is 2.14 times more volatile than Performance Trust Strategic. It trades about 0.09 of its potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.11 per unit of risk. If you would invest 1,211 in Fidelity Freedom Blend on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Fidelity Freedom Blend or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Performance Trust Strategic
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Performance Trust |
Fidelity Freedom and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Performance Trust
The main advantage of trading using opposite Fidelity Freedom and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.| Fidelity Freedom vs. Ab Select Longshort | Fidelity Freedom vs. Siit Ultra Short | Fidelity Freedom vs. Astor Longshort Fund | Fidelity Freedom vs. Rbc Ultra Short Fixed |
| Performance Trust vs. Pimco Income Fund | Performance Trust vs. HUMANA INC | Performance Trust vs. Aquagold International | Performance Trust vs. Barloworld Ltd ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
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| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |