Correlation Between Fidelity Series and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Series 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 Series 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 Series International and Fidelity Freedom 2015, you can compare the effects of market volatilities on Fidelity Series 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 Series with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Series and Fidelity Freedom.
Diversification Opportunities for Fidelity Series and Fidelity Freedom
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FIDELITY and Fidelity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Series International and Fidelity Freedom 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2015 and Fidelity Series 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 Series International 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 2015 has no effect on the direction of Fidelity Series i.e., Fidelity Series and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Series and Fidelity Freedom
Assuming the 90 days horizon Fidelity Series International is expected to under-perform the Fidelity Freedom. In addition to that, Fidelity Series is 2.18 times more volatile than Fidelity Freedom 2015. It trades about -0.16 of its total potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about -0.02 per unit of volatility. If you would invest 1,184 in Fidelity Freedom 2015 on August 27, 2024 and sell it today you would lose (2.00) from holding Fidelity Freedom 2015 or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Series International vs. Fidelity Freedom 2015
Performance |
| Timeline |
| Fidelity Series Inte |
| Fidelity Freedom 2015 |
Fidelity Series and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Series and Fidelity Freedom
The main advantage of trading using opposite Fidelity Series and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Series 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.| Fidelity Series vs. Fidelity Freedom 2015 | Fidelity Series vs. Fidelity Puritan Fund | Fidelity Series vs. Fidelity Puritan Fund | Fidelity Series vs. Fidelity Pennsylvania Municipal |
| Fidelity Freedom vs. Quantitative Longshort Equity | Fidelity Freedom vs. Siit Ultra Short | Fidelity Freedom vs. Ultra Short Fixed Income | Fidelity Freedom vs. Vanguard Institutional Short Term |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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