Correlation Between Mutual Of and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Fidelity Freedom Blend, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Fidelity Freedom.
Diversification Opportunities for Mutual Of and Fidelity Freedom
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mutual and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America 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 Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Mutual Of and Fidelity Freedom
Assuming the 90 days horizon Mutual Of America is expected to generate 2.77 times more return on investment than Fidelity Freedom. However, Mutual Of is 2.77 times more volatile than Fidelity Freedom Blend. It trades about 0.11 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.21 per unit of risk. If you would invest 1,450 in Mutual Of America on October 28, 2024 and sell it today you would earn a total of 26.00 from holding Mutual Of America or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Mutual Of America |
| Fidelity Freedom Blend |
Mutual Of and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Fidelity Freedom
The main advantage of trading using opposite Mutual Of and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Investec Emerging Markets | Mutual Of vs. Doubleline Emerging Markets | Mutual Of vs. Siit Emerging Markets | Mutual Of vs. Growth Strategy Fund |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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