Correlation Between Fidelity Freedom and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Flex 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 Flex 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 Flex Freedom, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Flex.
Diversification Opportunities for Fidelity Freedom and Fidelity Flex
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Fidelity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2015 and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Flex go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Flex
Assuming the 90 days horizon Fidelity Freedom is expected to generate 6.36 times less return on investment than Fidelity Flex. But when comparing it to its historical volatility, Fidelity Freedom 2015 is 2.05 times less risky than Fidelity Flex. It trades about 0.03 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,328 in Fidelity Flex Freedom on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Fidelity Flex Freedom or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Fidelity Freedom 2015 vs. Fidelity Flex Freedom
Performance |
| Timeline |
| Fidelity Freedom 2015 |
| Fidelity Flex Freedom |
Fidelity Freedom and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Flex
The main advantage of trading using opposite Fidelity Freedom and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| Fidelity Freedom vs. Copeland Risk Managed | Fidelity Freedom vs. Pace High Yield | Fidelity Freedom vs. Ppm High Yield | Fidelity Freedom vs. Artisan High Income |
| Fidelity Flex vs. Europac Gold Fund | Fidelity Flex vs. Fidelity Advisor Gold | Fidelity Flex vs. Gamco Global Gold | Fidelity Flex vs. Sprott Gold Equity |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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