Correlation Between Fidelity Freedom and Fidelity Blue
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Blue 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 Fidelity Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2015 and Fidelity Blue Chip, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Blue 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 Fidelity Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Blue.
Diversification Opportunities for Fidelity Freedom and Fidelity Blue
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fidelity and Fidelity is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2015 and Fidelity Blue Chip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Blue Chip 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 2015 are associated (or correlated) with Fidelity Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Blue Chip has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Blue go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Blue
Assuming the 90 days horizon Fidelity Freedom is expected to generate 4.24 times less return on investment than Fidelity Blue. But when comparing it to its historical volatility, Fidelity Freedom 2015 is 2.92 times less risky than Fidelity Blue. It trades about 0.1 of its potential returns per unit of risk. Fidelity Blue Chip is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,696 in Fidelity Blue Chip on September 14, 2024 and sell it today you would earn a total of 2,091 from holding Fidelity Blue Chip or generate 123.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fidelity Freedom 2015 vs. Fidelity Blue Chip
Performance |
| Timeline |
| Fidelity Freedom 2015 |
| Fidelity Blue Chip |
Fidelity Freedom and Fidelity Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Blue
The main advantage of trading using opposite Fidelity Freedom and Fidelity Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Blue 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 Blue will offset losses from the drop in Fidelity Blue's long position.| Fidelity Freedom vs. General Money Market | Fidelity Freedom vs. Hsbc Treasury Money | Fidelity Freedom vs. John Hancock Money | Fidelity Freedom vs. Schwab Treasury Money |
| Fidelity Blue vs. Smallcap Growth Fund | Fidelity Blue vs. Small Pany Growth | Fidelity Blue vs. Guidemark Smallmid Cap | Fidelity Blue vs. Ab Small Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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