Correlation Between Fidelity Freedom and One Choice
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2045 and One Choice 2045, you can compare the effects of market volatilities on Fidelity Freedom and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and One Choice.
Diversification Opportunities for Fidelity Freedom and One Choice
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and One is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2045 and One Choice 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice 2045 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 2045 are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice 2045 has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and One Choice go up and down completely randomly.
Pair Corralation between Fidelity Freedom and One Choice
Assuming the 90 days horizon Fidelity Freedom is expected to generate 1.24 times less return on investment than One Choice. In addition to that, Fidelity Freedom is 1.36 times more volatile than One Choice 2045. It trades about 0.07 of its total potential returns per unit of risk. One Choice 2045 is currently generating about 0.11 per unit of volatility. If you would invest 1,847 in One Choice 2045 on September 3, 2024 and sell it today you would earn a total of 37.00 from holding One Choice 2045 or generate 2.0% 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 2045 vs. One Choice 2045
Performance |
| Timeline |
| Fidelity Freedom 2045 |
| One Choice 2045 |
Fidelity Freedom and One Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and One Choice
The main advantage of trading using opposite Fidelity Freedom and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.| Fidelity Freedom vs. Fidelity Freedom 2050 | Fidelity Freedom vs. Fidelity Freedom 2005 | Fidelity Freedom vs. Fidelity Freedom 2035 | Fidelity Freedom vs. Fidelity Freedom 2015 |
| One Choice vs. One Choice 2035 | One Choice vs. One Choice 2025 | One Choice vs. One Choice In | One Choice vs. One Choice 2040 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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