Correlation Between Fidelity Flex and American Funds
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and American Funds 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 Flex and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Freedom and American Funds Inflation, you can compare the effects of market volatilities on Fidelity Flex and American Funds 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 Flex with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and American Funds.
Diversification Opportunities for Fidelity Flex and American Funds
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and American is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Freedom and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Inflation and Fidelity Flex 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 Flex Freedom are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and American Funds go up and down completely randomly.
Pair Corralation between Fidelity Flex and American Funds
Assuming the 90 days horizon Fidelity Flex Freedom is expected to generate 2.95 times more return on investment than American Funds. However, Fidelity Flex is 2.95 times more volatile than American Funds Inflation. It trades about 0.09 of its potential returns per unit of risk. American Funds Inflation is currently generating about 0.09 per unit of risk. If you would invest 1,266 in Fidelity Flex Freedom on September 1, 2024 and sell it today you would earn a total of 105.00 from holding Fidelity Flex Freedom or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Flex Freedom vs. American Funds Inflation
Performance |
| Timeline |
| Fidelity Flex Freedom |
| American Funds Inflation |
Fidelity Flex and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and American Funds
The main advantage of trading using opposite Fidelity Flex and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Fidelity Flex vs. Aig Government Money | Fidelity Flex vs. Inverse Government Long | Fidelity Flex vs. Blackrock Government Bond | Fidelity Flex vs. Us Government Plus |
| American Funds vs. Pace Large Growth | American Funds vs. Legg Mason Bw | American Funds vs. Tax Managed Large Cap | American Funds vs. Strategic Allocation Aggressive |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |