Correlation Between Fidelity Freedom and Ancora Microcap
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Ancora Microcap 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 Ancora Microcap 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 Ancora Microcap Fund, you can compare the effects of market volatilities on Fidelity Freedom and Ancora Microcap 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 Ancora Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Ancora Microcap.
Diversification Opportunities for Fidelity Freedom and Ancora Microcap
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Ancora is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Ancora Microcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora Microcap 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 Ancora Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora Microcap has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Ancora Microcap go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Ancora Microcap
Assuming the 90 days horizon Fidelity Freedom is expected to generate 3.09 times less return on investment than Ancora Microcap. But when comparing it to its historical volatility, Fidelity Freedom Index is 2.44 times less risky than Ancora Microcap. It trades about 0.31 of its potential returns per unit of risk. Ancora Microcap Fund is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,640 in Ancora Microcap Fund on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Ancora Microcap Fund or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Ancora Microcap Fund
Performance |
| Timeline |
| Fidelity Freedom Index |
| Ancora Microcap |
Fidelity Freedom and Ancora Microcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Ancora Microcap
The main advantage of trading using opposite Fidelity Freedom and Ancora Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Ancora Microcap 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 Ancora Microcap will offset losses from the drop in Ancora Microcap's long position.| Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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