Correlation Between Fidelity Overseas and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Overseas 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 Overseas 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 Overseas Fund and Fidelity Freedom 2015, you can compare the effects of market volatilities on Fidelity Overseas 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 Overseas with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Overseas and Fidelity Freedom.
Diversification Opportunities for Fidelity Overseas and Fidelity Freedom
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Overseas Fund 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 Overseas 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 Overseas Fund 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 Overseas i.e., Fidelity Overseas and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Overseas and Fidelity Freedom
Assuming the 90 days horizon Fidelity Overseas Fund is expected to generate 2.05 times more return on investment than Fidelity Freedom. However, Fidelity Overseas is 2.05 times more volatile than Fidelity Freedom 2015. It trades about 0.07 of its potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about 0.1 per unit of risk. If you would invest 4,989 in Fidelity Overseas Fund on September 14, 2024 and sell it today you would earn a total of 1,657 from holding Fidelity Overseas Fund or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Overseas Fund vs. Fidelity Freedom 2015
Performance |
| Timeline |
| Fidelity Overseas |
| Fidelity Freedom 2015 |
Fidelity Overseas and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Overseas and Fidelity Freedom
The main advantage of trading using opposite Fidelity Overseas and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Overseas 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 Overseas vs. Fidelity Freedom 2015 | Fidelity Overseas vs. Fidelity Puritan Fund | Fidelity Overseas vs. Fidelity Puritan Fund | Fidelity Overseas vs. Fidelity Pennsylvania Municipal |
| Fidelity Freedom vs. General Money Market | Fidelity Freedom vs. Hsbc Treasury Money | Fidelity Freedom vs. John Hancock Money | Fidelity Freedom vs. Schwab Treasury Money |
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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