Correlation Between Lsv Small and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Lsv Small 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 Lsv Small and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Small Cap and Fidelity Freedom Blend, you can compare the effects of market volatilities on Lsv Small 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 Lsv Small with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Small and Fidelity Freedom.
Diversification Opportunities for Lsv Small and Fidelity Freedom
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsv and Fidelity is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap 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 Lsv Small 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 Lsv Small Cap 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 Lsv Small i.e., Lsv Small and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Lsv Small and Fidelity Freedom
Assuming the 90 days horizon Lsv Small Cap is expected to under-perform the Fidelity Freedom. In addition to that, Lsv Small is 1.69 times more volatile than Fidelity Freedom Blend. It trades about -0.04 of its total potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.11 per unit of volatility. If you would invest 1,274 in Fidelity Freedom Blend on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Fidelity Freedom Blend or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Small Cap vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Lsv Small Cap |
| Fidelity Freedom Blend |
Lsv Small and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Small and Fidelity Freedom
The main advantage of trading using opposite Lsv Small and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Small 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.| Lsv Small vs. Amg Timessquare Mid | Lsv Small vs. Lsv Value Equity | Lsv Small vs. Baron Discovery Fund | Lsv Small vs. Victory Sycamore Established |
| Fidelity Freedom vs. Pender Real Estate | Fidelity Freedom vs. Fidelity Real Estate | Fidelity Freedom vs. Columbia Real Estate | Fidelity Freedom vs. Short Real Estate |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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