Correlation Between Voya High and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Voya High 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 Voya High and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Fidelity Freedom Index, you can compare the effects of market volatilities on Voya High 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 Voya High with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Fidelity Freedom.
Diversification Opportunities for Voya High and Fidelity Freedom
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voya and Fidelity is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Voya High 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 Voya High Yield 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 Index has no effect on the direction of Voya High i.e., Voya High and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Voya High and Fidelity Freedom
Assuming the 90 days horizon Voya High is expected to generate 1.57 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Voya High Yield is 2.45 times less risky than Fidelity Freedom. It trades about 0.11 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,056 in Fidelity Freedom Index on October 14, 2024 and sell it today you would earn a total of 514.00 from holding Fidelity Freedom Index or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Fidelity Freedom Index
Performance |
| Timeline |
| Voya High Yield |
| Fidelity Freedom Index |
Voya High and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Fidelity Freedom
The main advantage of trading using opposite Voya High and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High 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.| Voya High vs. Old Westbury Municipal | Voya High vs. Alpine Ultra Short | Voya High vs. Fidelity California Municipal | Voya High vs. T Rowe Price |
| Fidelity Freedom vs. Virtus High Yield | Fidelity Freedom vs. Inverse High Yield | Fidelity Freedom vs. Siit High Yield | Fidelity Freedom vs. Voya High Yield |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |