Correlation Between Knife River and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Knife River 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 Knife River and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Fidelity Freedom 2035, you can compare the effects of market volatilities on Knife River 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 Knife River with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Fidelity Freedom.
Diversification Opportunities for Knife River and Fidelity Freedom
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knife and Fidelity is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Fidelity Freedom 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2035 and Knife River 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 Knife River 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 2035 has no effect on the direction of Knife River i.e., Knife River and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Knife River and Fidelity Freedom
Considering the 90-day investment horizon Knife River is expected to generate 2.8 times more return on investment than Fidelity Freedom. However, Knife River is 2.8 times more volatile than Fidelity Freedom 2035. It trades about -0.08 of its potential returns per unit of risk. Fidelity Freedom 2035 is currently generating about -0.34 per unit of risk. If you would invest 10,534 in Knife River on October 7, 2024 and sell it today you would lose (432.00) from holding Knife River or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Fidelity Freedom 2035
Performance |
| Timeline |
| Knife River |
| Fidelity Freedom 2035 |
Knife River and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Fidelity Freedom
The main advantage of trading using opposite Knife River and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River 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.| Knife River vs. Boston Properties | Knife River vs. JD Sports Fashion | Knife River vs. Saia Inc | Knife River vs. InfuSystems Holdings |
| Fidelity Freedom vs. Fidelity Freedom 2025 | Fidelity Freedom vs. Fidelity Freedom 2015 | Fidelity Freedom vs. Fidelity Freedom 2040 | Fidelity Freedom vs. Fidelity Freedom 2030 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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