Correlation Between Fidelity Freedom and Fidelity Europe
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Europe 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 Europe 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 Europe Fund, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Europe 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 Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Europe.
Diversification Opportunities for Fidelity Freedom and Fidelity Europe
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Fidelity is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Fidelity Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Europe 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 Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Europe has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Europe go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Europe
Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 0.76 times more return on investment than Fidelity Europe. However, Fidelity Freedom Index is 1.32 times less risky than Fidelity Europe. It trades about 0.12 of its potential returns per unit of risk. Fidelity Europe Fund is currently generating about -0.13 per unit of risk. If you would invest 2,664 in Fidelity Freedom Index on August 31, 2024 and sell it today you would earn a total of 41.00 from holding Fidelity Freedom Index or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Fidelity Europe Fund
Performance |
| Timeline |
| Fidelity Freedom Index |
| Fidelity Europe |
Fidelity Freedom and Fidelity Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Europe
The main advantage of trading using opposite Fidelity Freedom and Fidelity Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Europe 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 Europe will offset losses from the drop in Fidelity Europe's 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 Europe vs. Invesco Global Health | Fidelity Europe vs. Alger Health Sciences | Fidelity Europe vs. Baillie Gifford Health | Fidelity Europe vs. Highland Longshort Healthcare |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Directory Find actively traded commodities issued by global exchanges |