Correlation Between Firsthand Technology and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Firsthand 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 Firsthand 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 Firsthand Technology Opportunities and Fidelity Freedom Blend, you can compare the effects of market volatilities on Firsthand 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 Firsthand Technology with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Fidelity Freedom.
Diversification Opportunities for Firsthand Technology and Fidelity Freedom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Firsthand and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni 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 Firsthand 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 Firsthand Technology Opportunities 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 Firsthand Technology i.e., Firsthand Technology and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Firsthand Technology and Fidelity Freedom
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Fidelity Freedom. In addition to that, Firsthand Technology is 2.49 times more volatile than Fidelity Freedom Blend. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.09 per unit of volatility. If you would invest 1,078 in Fidelity Freedom Blend on September 12, 2024 and sell it today you would earn a total of 257.00 from holding Fidelity Freedom Blend or generate 23.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Firsthand Technology |
| Fidelity Freedom Blend |
Firsthand Technology and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Fidelity Freedom
The main advantage of trading using opposite Firsthand Technology and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand 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.| Firsthand Technology vs. Berkshire Focus | Firsthand Technology vs. Red Oak Technology | Firsthand Technology vs. Jacob Internet Fund | Firsthand Technology vs. Kinetics Internet Fund |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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