Correlation Between Jpmorgan Smartretirement and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Smartretirement 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 Jpmorgan Smartretirement and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Smartretirement 2040 and Fidelity Freedom 2040, you can compare the effects of market volatilities on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Smartretirement and Fidelity Freedom.
Diversification Opportunities for Jpmorgan Smartretirement and Fidelity Freedom
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jpmorgan and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Smartretirement 2040 and Fidelity Freedom 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2040 and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 2040 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 2040 has no effect on the direction of Jpmorgan Smartretirement i.e., Jpmorgan Smartretirement and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Jpmorgan Smartretirement and Fidelity Freedom
Assuming the 90 days horizon Jpmorgan Smartretirement is expected to generate 1.48 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Jpmorgan Smartretirement 2040 is 1.21 times less risky than Fidelity Freedom. It trades about 0.05 of its potential returns per unit of risk. Fidelity Freedom 2040 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,188 in Fidelity Freedom 2040 on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Fidelity Freedom 2040 or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Smartretirement 2040 vs. Fidelity Freedom 2040
Performance |
| Timeline |
| Jpmorgan Smartretirement |
| Fidelity Freedom 2040 |
Jpmorgan Smartretirement and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Smartretirement and Fidelity Freedom
The main advantage of trading using opposite Jpmorgan Smartretirement and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Smartretirement 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.The idea behind Jpmorgan Smartretirement 2040 and Fidelity Freedom 2040 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Fidelity Freedom vs. Fidelity Freedom 2030 | Fidelity Freedom vs. Fidelity Freedom 2010 | Fidelity Freedom vs. Fidelity Freedom Income | Fidelity Freedom vs. Fidelity Freedom 2020 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |