Correlation Between Fidelity Puritan and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan 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 Puritan 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 Puritan Fund and Fidelity Freedom Blend, you can compare the effects of market volatilities on Fidelity Puritan 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 Puritan with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Freedom.
Diversification Opportunities for Fidelity Puritan and Fidelity Freedom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Fidelity Puritan 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 Puritan 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 Blend has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Freedom
Assuming the 90 days horizon Fidelity Puritan Fund is expected to generate 0.88 times more return on investment than Fidelity Freedom. However, Fidelity Puritan Fund is 1.14 times less risky than Fidelity Freedom. It trades about 0.12 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.08 per unit of risk. If you would invest 2,341 in Fidelity Puritan Fund on September 1, 2024 and sell it today you would earn a total of 240.00 from holding Fidelity Puritan Fund or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Freedom Blend |
Fidelity Puritan and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Freedom
The main advantage of trading using opposite Fidelity Puritan and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan 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 Puritan vs. Mutual Of America | Fidelity Puritan vs. American Century Etf | Fidelity Puritan vs. Boston Partners Small | Fidelity Puritan vs. Queens Road Small |
| Fidelity Freedom vs. Fidelity Freedom 2045 | Fidelity Freedom vs. Fidelity Freedom 2005 | Fidelity Freedom vs. Fidelity Freedom Income | Fidelity Freedom vs. Fidelity Freedom 2015 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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