Correlation Between Fidelity Income and Fidelity Freedom

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Fidelity Income 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 Income 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 Income Replacement and Fidelity Freedom Index, you can compare the effects of market volatilities on Fidelity Income 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 Income with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Income and Fidelity Freedom.

Diversification Opportunities for Fidelity Income and Fidelity Freedom

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Fidelity and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Income Replacement and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Fidelity Income 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 Income Replacement 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 Index has no effect on the direction of Fidelity Income i.e., Fidelity Income and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Fidelity Income and Fidelity Freedom

Assuming the 90 days horizon Fidelity Income Replacement is expected to generate 1.31 times more return on investment than Fidelity Freedom. However, Fidelity Income is 1.31 times more volatile than Fidelity Freedom Index. It trades about 0.07 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.08 per unit of risk. If you would invest  6,439  in Fidelity Income Replacement on September 5, 2024 and sell it today you would earn a total of  75.00  from holding Fidelity Income Replacement or generate 1.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fidelity Income Replacement  vs.  Fidelity Freedom Index

 Performance 
       Timeline  
Fidelity Income Repl 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Income Replacement are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Fidelity Freedom Index 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom Index are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Income and Fidelity Freedom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity Income and Fidelity Freedom

The main advantage of trading using opposite Fidelity Income and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Income 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 Income Replacement and Fidelity Freedom Index 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Equity Valuation
Check real value of public entities based on technical and fundamental data
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency