Correlation Between Vanguard Target and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Vanguard Target 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 Vanguard Target and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Target Retirement and Fidelity Freedom Index, you can compare the effects of market volatilities on Vanguard Target 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 Vanguard Target with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Fidelity Freedom.
Diversification Opportunities for Vanguard Target and Fidelity Freedom
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Vanguard Target 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 Vanguard Target Retirement 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 Index has no effect on the direction of Vanguard Target i.e., Vanguard Target and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Vanguard Target and Fidelity Freedom
Assuming the 90 days horizon Vanguard Target is expected to generate 1.02 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Vanguard Target Retirement is 1.07 times less risky than Fidelity Freedom. It trades about 0.09 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,063 in Fidelity Freedom Index on September 1, 2024 and sell it today you would earn a total of 642.00 from holding Fidelity Freedom Index or generate 31.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Fidelity Freedom Index
Performance |
| Timeline |
| Vanguard Target Reti |
| Fidelity Freedom Index |
Vanguard Target and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Fidelity Freedom
The main advantage of trading using opposite Vanguard Target and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target 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.| Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
| Fidelity Freedom vs. International Investors Gold | Fidelity Freedom vs. Gabelli Gold Fund | Fidelity Freedom vs. Oppenheimer Gold Special | Fidelity Freedom vs. Short Precious Metals |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |