Correlation Between Fidelity Freedom and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Natixis Sustainable 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 Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2035 and Natixis Sustainable Future, you can compare the effects of market volatilities on Fidelity Freedom and Natixis Sustainable 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 Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Natixis Sustainable.
Diversification Opportunities for Fidelity Freedom and Natixis Sustainable
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Natixis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2035 and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable 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 2035 are associated (or correlated) with Natixis Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Sustainable has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Natixis Sustainable go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Natixis Sustainable
Assuming the 90 days horizon Fidelity Freedom 2035 is expected to generate 1.51 times more return on investment than Natixis Sustainable. However, Fidelity Freedom is 1.51 times more volatile than Natixis Sustainable Future. It trades about 0.09 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.1 per unit of risk. If you would invest 1,353 in Fidelity Freedom 2035 on September 3, 2024 and sell it today you would earn a total of 301.00 from holding Fidelity Freedom 2035 or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom 2035 vs. Natixis Sustainable Future
Performance |
| Timeline |
| Fidelity Freedom 2035 |
| Natixis Sustainable |
Fidelity Freedom and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Natixis Sustainable
The main advantage of trading using opposite Fidelity Freedom and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Natixis Sustainable 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 Natixis Sustainable will offset losses from the drop in Natixis Sustainable's long position.| Fidelity Freedom vs. T Rowe Price | Fidelity Freedom vs. T Rowe Price | Fidelity Freedom vs. T Rowe Price | Fidelity Freedom vs. T Rowe Price |
| Natixis Sustainable vs. Fidelity Freedom 2005 | Natixis Sustainable vs. Fidelity Freedom 2025 | Natixis Sustainable vs. Fidelity Freedom 2010 | Natixis Sustainable vs. Fidelity Freedom 2035 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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