Correlation Between Fidelity Freedom and Voya Index
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Voya Index 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 Voya Index 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 Voya Index Solution, you can compare the effects of market volatilities on Fidelity Freedom and Voya Index 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 Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Voya Index.
Diversification Opportunities for Fidelity Freedom and Voya Index
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Voya Index go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Voya Index
Assuming the 90 days horizon Fidelity Freedom is expected to generate 1.28 times less return on investment than Voya Index. But when comparing it to its historical volatility, Fidelity Freedom Index is 1.03 times less risky than Voya Index. It trades about 0.12 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,797 in Voya Index Solution on August 31, 2024 and sell it today you would earn a total of 36.00 from holding Voya Index Solution or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Voya Index Solution
Performance |
| Timeline |
| Fidelity Freedom Index |
| Voya Index Solution |
Fidelity Freedom and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Voya Index
The main advantage of trading using opposite Fidelity Freedom and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index's long position.| Fidelity Freedom vs. Vanguard Target Retirement | Fidelity Freedom vs. American Funds 2055 | Fidelity Freedom vs. American Funds 2055 | Fidelity Freedom vs. T Rowe Price |
| Voya Index vs. Vanguard Target Retirement | Voya Index vs. American Funds 2055 | Voya Index vs. American Funds 2055 | Voya Index vs. Fidelity Freedom Index |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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