Correlation Between Fidelity Flex and Great-west Lifetime
Can any of the company-specific risk be diversified away by investing in both Fidelity Flex and Great-west Lifetime 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 Great-west Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Flex Servative and Great West Lifetime 2060, you can compare the effects of market volatilities on Fidelity Flex and Great-west Lifetime 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 Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Flex and Great-west Lifetime.
Diversification Opportunities for Fidelity Flex and Great-west Lifetime
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Great-west is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Flex Servative and Great West Lifetime 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Servative are associated (or correlated) with Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Fidelity Flex i.e., Fidelity Flex and Great-west Lifetime go up and down completely randomly.
Pair Corralation between Fidelity Flex and Great-west Lifetime
Assuming the 90 days horizon Fidelity Flex is expected to generate 2.52 times less return on investment than Great-west Lifetime. But when comparing it to its historical volatility, Fidelity Flex Servative is 8.93 times less risky than Great-west Lifetime. It trades about 0.21 of its potential returns per unit of risk. Great West Lifetime 2060 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,016 in Great West Lifetime 2060 on November 3, 2024 and sell it today you would earn a total of 109.00 from holding Great West Lifetime 2060 or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Flex Servative vs. Great West Lifetime 2060
Performance |
| Timeline |
| Fidelity Flex Servative |
| Great West Lifetime |
Fidelity Flex and Great-west Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Flex and Great-west Lifetime
The main advantage of trading using opposite Fidelity Flex and Great-west Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Flex position performs unexpectedly, Great-west Lifetime 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 Great-west Lifetime will offset losses from the drop in Great-west Lifetime's long position.| Fidelity Flex vs. Upright Growth Income | Fidelity Flex vs. L Abbett Growth | Fidelity Flex vs. Eip Growth And | Fidelity Flex vs. Mid Cap Growth |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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