Correlation Between Federated Global and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Federated Global and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Fidelity Freedom Index, you can compare the effects of market volatilities on Federated Global 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 Federated Global with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Fidelity Freedom.
Diversification Opportunities for Federated Global and Fidelity Freedom
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Federated Global 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 Federated Global Allocation 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 Index has no effect on the direction of Federated Global i.e., Federated Global and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Federated Global and Fidelity Freedom
Assuming the 90 days horizon Federated Global is expected to generate 1.41 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Federated Global Allocation is 1.3 times less risky than Fidelity Freedom. It trades about 0.12 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,828 in Fidelity Freedom Index on September 3, 2024 and sell it today you would earn a total of 415.00 from holding Fidelity Freedom Index or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Fidelity Freedom Index
Performance |
| Timeline |
| Federated Global All |
| Fidelity Freedom Index |
Federated Global and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Fidelity Freedom
The main advantage of trading using opposite Federated Global and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Fidelity Freedom vs. Fidelity Advisor Health | Fidelity Freedom vs. Baillie Gifford Health | Fidelity Freedom vs. Health Biotchnology Portfolio | Fidelity Freedom vs. Delaware Healthcare Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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