Correlation Between Fidelity Freedom and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Advisor 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 Advisor 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 Fidelity Advisor Stock, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Advisor 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 Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Advisor.
Diversification Opportunities for Fidelity Freedom and Fidelity Advisor
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Fidelity Advisor Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Stock 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Stock has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Advisor
Assuming the 90 days horizon Fidelity Freedom Blend is expected to generate 0.7 times more return on investment than Fidelity Advisor. However, Fidelity Freedom Blend is 1.43 times less risky than Fidelity Advisor. It trades about 0.08 of its potential returns per unit of risk. Fidelity Advisor Stock is currently generating about 0.06 per unit of risk. If you would invest 1,061 in Fidelity Freedom Blend on September 12, 2024 and sell it today you would earn a total of 234.00 from holding Fidelity Freedom Blend or generate 22.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Fidelity Advisor Stock
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Fidelity Advisor Stock |
Fidelity Freedom and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Advisor
The main advantage of trading using opposite Fidelity Freedom and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Advisor 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 Advisor will offset losses from the drop in Fidelity Advisor's long position.| Fidelity Freedom vs. Lsv Small Cap | Fidelity Freedom vs. Pace Smallmedium Value | Fidelity Freedom vs. Lord Abbett Small | Fidelity Freedom vs. Victory Rs Partners |
| Fidelity Advisor vs. Western Asset Diversified | Fidelity Advisor vs. Sp Midcap Index | Fidelity Advisor vs. Pnc Emerging Markets | Fidelity Advisor vs. Artisan Emerging Markets |
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.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |