Correlation Between Fidelity Freedom and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Series 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 Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Index and Fidelity Series Growth, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Series 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 Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Series.
Diversification Opportunities for Fidelity Freedom and Fidelity Series
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Fidelity Series Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Growth 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 Index are associated (or correlated) with Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Growth has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Series go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Series
Assuming the 90 days horizon Fidelity Freedom is expected to generate 2.41 times less return on investment than Fidelity Series. But when comparing it to its historical volatility, Fidelity Freedom Index is 1.37 times less risky than Fidelity Series. It trades about 0.12 of its potential returns per unit of risk. Fidelity Series Growth is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,338 in Fidelity Series Growth on August 31, 2024 and sell it today you would earn a total of 88.00 from holding Fidelity Series Growth or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Fidelity Series Growth
Performance |
| Timeline |
| Fidelity Freedom Index |
| Fidelity Series Growth |
Fidelity Freedom and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Series
The main advantage of trading using opposite Fidelity Freedom and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Series 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 Series will offset losses from the drop in Fidelity Series' long position.| Fidelity Freedom vs. Hennessy Nerstone Mid | Fidelity Freedom vs. Columbia Small Cap | Fidelity Freedom vs. Fidelity Small Cap | Fidelity Freedom vs. Victory Rs Partners |
| Fidelity Series vs. Ambrus Core Bond | Fidelity Series vs. Transamerica Intermediate Muni | Fidelity Series vs. Jpmorgan Short Intermediate Municipal | Fidelity Series vs. Calamos Short Term Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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