Correlation Between Highland Longshort and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Highland Longshort 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 Highland Longshort and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Fidelity Freedom 2005, you can compare the effects of market volatilities on Highland Longshort 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 Highland Longshort with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Fidelity Freedom.
Diversification Opportunities for Highland Longshort and Fidelity Freedom
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Highland and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Fidelity Freedom 2005 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2005 and Highland Longshort 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 Highland Longshort Healthcare 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 2005 has no effect on the direction of Highland Longshort i.e., Highland Longshort and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Highland Longshort and Fidelity Freedom
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.8 times more return on investment than Fidelity Freedom. However, Highland Longshort Healthcare is 1.24 times less risky than Fidelity Freedom. It trades about 0.17 of its potential returns per unit of risk. Fidelity Freedom 2005 is currently generating about 0.09 per unit of risk. If you would invest 1,540 in Highland Longshort Healthcare on September 2, 2024 and sell it today you would earn a total of 123.00 from holding Highland Longshort Healthcare or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Fidelity Freedom 2005
Performance |
| Timeline |
| Highland Longshort |
| Fidelity Freedom 2005 |
Highland Longshort and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Fidelity Freedom
The main advantage of trading using opposite Highland Longshort and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort 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.| Highland Longshort vs. Fidelity Advisor Diversified | Highland Longshort vs. Adams Diversified Equity | Highland Longshort vs. Prudential Core Conservative | Highland Longshort vs. Jhancock Diversified Macro |
| Fidelity Freedom vs. Fidelity Freedom 2015 | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Pennsylvania Municipal |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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