Correlation Between Fidelity Freedom and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Barings Emerging 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 Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Index and Barings Emerging Markets, you can compare the effects of market volatilities on Fidelity Freedom and Barings Emerging 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Barings Emerging.
Diversification Opportunities for Fidelity Freedom and Barings Emerging
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Barings is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Index are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Barings Emerging go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Barings Emerging
Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 1.14 times more return on investment than Barings Emerging. However, Fidelity Freedom is 1.14 times more volatile than Barings Emerging Markets. It trades about 0.32 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 1,642 in Fidelity Freedom Index on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Fidelity Freedom Index or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Barings Emerging Markets
Performance |
| Timeline |
| Fidelity Freedom Index |
| Barings Emerging Markets |
Fidelity Freedom and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Barings Emerging
The main advantage of trading using opposite Fidelity Freedom and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Fidelity Freedom vs. Barings Emerging Markets | Fidelity Freedom vs. Origin Emerging Markets | Fidelity Freedom vs. Vanguard Developed Markets | Fidelity Freedom vs. Aqr Long Short Equity |
| Barings Emerging vs. Vy Goldman Sachs | Barings Emerging vs. Oppenheimer Gold Special | Barings Emerging vs. Gabelli Gold Fund | Barings Emerging vs. James Balanced Golden |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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