Correlation Between Invesco Technology and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Invesco Technology 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 Invesco Technology and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Technology Fund and Fidelity Freedom Blend, you can compare the effects of market volatilities on Invesco Technology 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 Invesco Technology with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Fidelity Freedom.
Diversification Opportunities for Invesco Technology and Fidelity Freedom
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Invesco Technology 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 Invesco Technology Fund 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 Blend has no effect on the direction of Invesco Technology i.e., Invesco Technology and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Invesco Technology and Fidelity Freedom
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 2.03 times more return on investment than Fidelity Freedom. However, Invesco Technology is 2.03 times more volatile than Fidelity Freedom Blend. It trades about 0.09 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.09 per unit of risk. If you would invest 4,995 in Invesco Technology Fund on September 12, 2024 and sell it today you would earn a total of 2,423 from holding Invesco Technology Fund or generate 48.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Invesco Technology |
| Fidelity Freedom Blend |
Invesco Technology and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Fidelity Freedom
The main advantage of trading using opposite Invesco Technology and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology 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.| Invesco Technology vs. Investec Global Franchise | Invesco Technology vs. Siit Global Managed | Invesco Technology vs. Qs Global Equity | Invesco Technology vs. Artisan Global Unconstrained |
| Fidelity Freedom vs. Blackrock Science Technology | Fidelity Freedom vs. Firsthand Technology Opportunities | Fidelity Freedom vs. Invesco Technology Fund | Fidelity Freedom vs. Icon Information Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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