Correlation Between Fidelity Freedom and Voya Solution
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Voya Solution 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 Voya Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2030 and Voya Solution 2030, you can compare the effects of market volatilities on Fidelity Freedom and Voya Solution 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 Voya Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Voya Solution.
Diversification Opportunities for Fidelity Freedom and Voya Solution
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Voya is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2030 and Voya Solution 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Solution 2030 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 2030 are associated (or correlated) with Voya Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Solution 2030 has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Voya Solution go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Voya Solution
Assuming the 90 days horizon Fidelity Freedom 2030 is expected to generate 1.05 times more return on investment than Voya Solution. However, Fidelity Freedom is 1.05 times more volatile than Voya Solution 2030. It trades about 0.21 of its potential returns per unit of risk. Voya Solution 2030 is currently generating about 0.13 per unit of risk. If you would invest 1,835 in Fidelity Freedom 2030 on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Fidelity Freedom 2030 or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Freedom 2030 vs. Voya Solution 2030
Performance |
| Timeline |
| Fidelity Freedom 2030 |
| Voya Solution 2030 |
Fidelity Freedom and Voya Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Voya Solution
The main advantage of trading using opposite Fidelity Freedom and Voya Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Voya Solution 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 Voya Solution will offset losses from the drop in Voya Solution'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 |
| Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Bond Index | Voya Solution vs. Voya Limited Maturity | Voya Solution vs. Voya Limited Maturity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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