Correlation Between Fidelity Freedom and Blackrock Lifepath
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Blackrock Lifepath 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 Blackrock Lifepath 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 Blackrock Lifepath Esg, you can compare the effects of market volatilities on Fidelity Freedom and Blackrock Lifepath 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 Blackrock Lifepath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Blackrock Lifepath.
Diversification Opportunities for Fidelity Freedom and Blackrock Lifepath
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and BlackRock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2045 and Blackrock Lifepath Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Lifepath Esg 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 Blackrock Lifepath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Lifepath Esg has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Blackrock Lifepath go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Blackrock Lifepath
Assuming the 90 days horizon Fidelity Freedom is expected to generate 1.3 times less return on investment than Blackrock Lifepath. In addition to that, Fidelity Freedom is 1.11 times more volatile than Blackrock Lifepath Esg. It trades about 0.1 of its total potential returns per unit of risk. Blackrock Lifepath Esg is currently generating about 0.14 per unit of volatility. If you would invest 1,394 in Blackrock Lifepath Esg on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Blackrock Lifepath Esg or generate 1.79% 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. Blackrock Lifepath Esg
Performance |
| Timeline |
| Fidelity Freedom 2045 |
| Blackrock Lifepath Esg |
Fidelity Freedom and Blackrock Lifepath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Blackrock Lifepath
The main advantage of trading using opposite Fidelity Freedom and Blackrock Lifepath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Blackrock Lifepath 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 Blackrock Lifepath will offset losses from the drop in Blackrock Lifepath'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 |
| Blackrock Lifepath vs. Vanguard Target Retirement | Blackrock Lifepath vs. American Funds 2045 | Blackrock Lifepath vs. American Funds 2045 | Blackrock Lifepath vs. Fidelity Freedom 2045 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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