Correlation Between Fidelity Freedom and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Blend and Lord Abbett Health, you can compare the effects of market volatilities on Fidelity Freedom and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Lord Abbett.
Diversification Opportunities for Fidelity Freedom and Lord Abbett
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fidelity and Lord is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Lord Abbett Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Health 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 Blend are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Health has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Lord Abbett go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Lord Abbett
Assuming the 90 days horizon Fidelity Freedom Blend is expected to generate 0.45 times more return on investment than Lord Abbett. However, Fidelity Freedom Blend is 2.24 times less risky than Lord Abbett. It trades about 0.08 of its potential returns per unit of risk. Lord Abbett Health is currently generating about 0.04 per unit of risk. If you would invest 907.00 in Fidelity Freedom Blend on September 13, 2024 and sell it today you would earn a total of 173.00 from holding Fidelity Freedom Blend or generate 19.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Lord Abbett Health
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Lord Abbett Health |
Fidelity Freedom and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Lord Abbett
The main advantage of trading using opposite Fidelity Freedom and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett'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 |
| Lord Abbett vs. Commonwealth Global Fund | Lord Abbett vs. L Abbett Fundamental | Lord Abbett vs. Eic Value Fund | Lord Abbett vs. Ab Small Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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