Correlation Between Fidelity Pennsylvania and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Pennsylvania 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 Pennsylvania 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 Pennsylvania Municipal and Fidelity Freedom 2015, you can compare the effects of market volatilities on Fidelity Pennsylvania 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 Pennsylvania with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Pennsylvania and Fidelity Freedom.
Diversification Opportunities for Fidelity Pennsylvania and Fidelity Freedom
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Pennsylvania Municipa 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 Pennsylvania 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 Pennsylvania Municipal 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 Pennsylvania i.e., Fidelity Pennsylvania and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Pennsylvania and Fidelity Freedom
Assuming the 90 days horizon Fidelity Pennsylvania is expected to generate 2.2 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Fidelity Pennsylvania Municipal is 1.84 times less risky than Fidelity Freedom. It trades about 0.07 of its potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,012 in Fidelity Freedom 2015 on August 28, 2024 and sell it today you would earn a total of 182.00 from holding Fidelity Freedom 2015 or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Pennsylvania Municipa vs. Fidelity Freedom 2015
Performance |
| Timeline |
| Fidelity Pennsylvania |
| Fidelity Freedom 2015 |
Fidelity Pennsylvania and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Pennsylvania and Fidelity Freedom
The main advantage of trading using opposite Fidelity Pennsylvania and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Pennsylvania 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.The idea behind Fidelity Pennsylvania Municipal and Fidelity Freedom 2015 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Fidelity Freedom vs. Fidelity Freedom 2015 | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Pennsylvania Municipal |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |