Correlation Between Fidelity Freedom and Fidelity Intermediate
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Intermediate 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 Intermediate 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 Intermediate Municipal, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Intermediate 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 Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Intermediate.
Diversification Opportunities for Fidelity Freedom and Fidelity Intermediate
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2015 and Fidelity Intermediate Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Intermediate 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 Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Intermediate has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Intermediate go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Intermediate
Assuming the 90 days horizon Fidelity Freedom 2015 is expected to under-perform the Fidelity Intermediate. In addition to that, Fidelity Freedom is 1.41 times more volatile than Fidelity Intermediate Municipal. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Intermediate Municipal is currently generating about 0.15 per unit of volatility. If you would invest 1,004 in Fidelity Intermediate Municipal on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Fidelity Intermediate Municipal or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom 2015 vs. Fidelity Intermediate Municipa
Performance |
| Timeline |
| Fidelity Freedom 2015 |
| Fidelity Intermediate |
Fidelity Freedom and Fidelity Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Intermediate
The main advantage of trading using opposite Fidelity Freedom and Fidelity Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Intermediate 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 Intermediate will offset losses from the drop in Fidelity Intermediate's long position.| Fidelity Freedom vs. Franklin Emerging Market | Fidelity Freedom vs. Origin Emerging Markets | Fidelity Freedom vs. Ep Emerging Markets | Fidelity Freedom vs. Barings Emerging Markets |
| Fidelity Intermediate vs. Fidelity Limited Term | Fidelity Intermediate vs. Fidelity Municipal Income | Fidelity Intermediate vs. Fidelity Tax Free Bond | Fidelity Intermediate vs. Fidelity Advisor Floating |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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