Correlation Between Fidelity Flex and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Fidelity Freedom 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 Flex and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Bond and Fidelity Freedom Blend, you can compare the effects of market volatilities on Fidelity Flex and Fidelity Freedom 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 Flex with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Fidelity Freedom.
Diversification Opportunities for Fidelity Flex and Fidelity Freedom
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and FIDELITY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Bond and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Fidelity Flex 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 Flex Bond are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom Blend has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Flex and Fidelity Freedom
If you would invest 1,295 in Fidelity Freedom Blend on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Fidelity Freedom Blend or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fidelity Flex Bond vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Fidelity Flex Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fidelity Freedom Blend |
Fidelity Flex and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and Fidelity Freedom
The main advantage of trading using opposite Fidelity Flex and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Fidelity Freedom 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 Freedom will offset losses from the drop in Fidelity Freedom's long position.The idea behind Fidelity Flex Bond and Fidelity Freedom Blend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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