Correlation Between Fidelity Freedom and Fidelity Puritan
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Puritan 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 Fidelity Puritan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2065 and Fidelity Puritan Fund, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Puritan 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 Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Puritan.
Diversification Opportunities for Fidelity Freedom and Fidelity Puritan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2065 and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan 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 2065 are associated (or correlated) with Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Puritan go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Puritan
Assuming the 90 days horizon Fidelity Freedom is expected to generate 1.47 times less return on investment than Fidelity Puritan. In addition to that, Fidelity Freedom is 1.08 times more volatile than Fidelity Puritan Fund. It trades about 0.25 of its total potential returns per unit of risk. Fidelity Puritan Fund is currently generating about 0.4 per unit of volatility. If you would invest 2,467 in Fidelity Puritan Fund on September 1, 2024 and sell it today you would earn a total of 114.00 from holding Fidelity Puritan Fund or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Freedom 2065 vs. Fidelity Puritan Fund
Performance |
| Timeline |
| Fidelity Freedom 2065 |
| Fidelity Puritan |
Fidelity Freedom and Fidelity Puritan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Puritan
The main advantage of trading using opposite Fidelity Freedom and Fidelity Puritan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Puritan 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 Fidelity Puritan will offset losses from the drop in Fidelity Puritan's long position.| Fidelity Freedom vs. Fidelity Freedom 2060 | Fidelity Freedom vs. Fidelity Freedom 2055 | Fidelity Freedom vs. Fidelity Freedom 2045 | Fidelity Freedom vs. Fidelity Freedom 2005 |
| Fidelity Puritan vs. Mutual Of America | Fidelity Puritan vs. American Century Etf | Fidelity Puritan vs. Boston Partners Small | Fidelity Puritan vs. Queens Road Small |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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