Correlation Between Fidelity Freedom and Wasatch Small
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Wasatch Small 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 Wasatch Small 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 Wasatch Small Cap, you can compare the effects of market volatilities on Fidelity Freedom and Wasatch Small 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 Wasatch Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Wasatch Small.
Diversification Opportunities for Fidelity Freedom and Wasatch Small
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Wasatch is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Wasatch Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Small Cap 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 Wasatch Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Small Cap has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Wasatch Small go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Wasatch Small
Assuming the 90 days horizon Fidelity Freedom Blend is expected to generate 0.12 times more return on investment than Wasatch Small. However, Fidelity Freedom Blend is 8.23 times less risky than Wasatch Small. It trades about 0.29 of its potential returns per unit of risk. Wasatch Small Cap is currently generating about -0.19 per unit of risk. If you would invest 1,251 in Fidelity Freedom Blend on September 16, 2024 and sell it today you would earn a total of 31.00 from holding Fidelity Freedom Blend or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Wasatch Small Cap
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Wasatch Small Cap |
Fidelity Freedom and Wasatch Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Wasatch Small
The main advantage of trading using opposite Fidelity Freedom and Wasatch Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Wasatch Small 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 Wasatch Small will offset losses from the drop in Wasatch Small's long position.| Fidelity Freedom vs. Wasatch Small Cap | Fidelity Freedom vs. Pioneer Diversified High | Fidelity Freedom vs. Fidelity Advisor Diversified | Fidelity Freedom vs. Oppenheimer International Diversified |
| Wasatch Small vs. Wasatch Small Cap | Wasatch Small vs. Wasatch Emerging Markets | Wasatch Small vs. Wasatch Emerging Markets | Wasatch Small vs. Wasatch Global Select |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |