Correlation Between Fidelity Freedom and Aam Select
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Aam Select 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 Aam Select 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 Aam Select Income, you can compare the effects of market volatilities on Fidelity Freedom and Aam Select 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 Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Aam Select.
Diversification Opportunities for Fidelity Freedom and Aam Select
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Aam is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income 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 Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Aam Select go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Aam Select
Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 0.91 times more return on investment than Aam Select. However, Fidelity Freedom Index is 1.1 times less risky than Aam Select. It trades about 0.32 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.16 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Aam Select Income
Performance |
| Timeline |
| Fidelity Freedom Index |
| Aam Select Income |
Fidelity Freedom and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Aam Select
The main advantage of trading using opposite Fidelity Freedom and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select'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 |
| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income | Aam Select vs. Aam Select Income |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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