Correlation Between Fidelity Freedom and Fidelity Freedom

Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom 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 Fidelity Freedom and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Freedom Income and Fidelity Freedom 2005, you can compare the effects of market volatilities on Fidelity Freedom 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 Fidelity Freedom with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Freedom.

Diversification Opportunities for Fidelity Freedom and Fidelity Freedom

0.0

Correlation Coefficient

Fidelity Freedom  Fidelity Freedom

Pay attention - limited upside

The 3 months correlation between Fidelity and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Income and Fidelity Freedom 2005 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2005 and Fidelity Freedom 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 Fidelity Freedom Income 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 2005 has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Fidelity Freedom and Fidelity Freedom

If you would invest  1,074  in Fidelity Freedom Income on December 1, 2024 and sell it today you would earn a total of  9.00  from holding Fidelity Freedom Income or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fidelity Freedom Income  vs.  Fidelity Freedom 2005

Fidelity Freedom Income

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Freedom 2005

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Freedom 2005 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Freedom and Fidelity Freedom

The main advantage of trading using opposite Fidelity Freedom and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom 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 Fidelity Freedom Income and Fidelity Freedom 2005 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.