Correlation Between Fidelity Freedom and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Kayne Anderson 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 Kayne Anderson 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 Kayne Anderson Renewable, you can compare the effects of market volatilities on Fidelity Freedom and Kayne Anderson 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 Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Kayne Anderson.
Diversification Opportunities for Fidelity Freedom and Kayne Anderson
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Kayne is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Kayne Anderson Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson Renewable 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 Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson Renewable has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Kayne Anderson go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Kayne Anderson
Assuming the 90 days horizon Fidelity Freedom is expected to generate 1.79 times less return on investment than Kayne Anderson. But when comparing it to its historical volatility, Fidelity Freedom Index is 1.77 times less risky than Kayne Anderson. It trades about 0.31 of its potential returns per unit of risk. Kayne Anderson Renewable is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 946.00 in Kayne Anderson Renewable on September 3, 2024 and sell it today you would earn a total of 46.00 from holding Kayne Anderson Renewable or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Kayne Anderson Renewable
Performance |
| Timeline |
| Fidelity Freedom Index |
| Kayne Anderson Renewable |
Fidelity Freedom and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Kayne Anderson
The main advantage of trading using opposite Fidelity Freedom and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson'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 |
| Kayne Anderson vs. Delaware Limited Term Diversified | Kayne Anderson vs. The Gabelli Small | Kayne Anderson vs. Tax Managed Mid Small | Kayne Anderson vs. Blackrock Sm Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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