Correlation Between Fidelity Freedom and Realestaterealreturn

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

By analyzing existing cross correlation between Fidelity Freedom 2065 and Realestaterealreturn Strategy Fund, you can compare the effects of market volatilities on Fidelity Freedom and Realestaterealreturn 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 Realestaterealreturn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Realestaterealreturn.

Diversification Opportunities for Fidelity Freedom and Realestaterealreturn

0.71

Correlation Coefficient

Fidelity Freedom  Realestaterealreturn

Poor diversification

The 3 months correlation between Fidelity and Realestaterealreturn is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2065 and Realestaterealreturn Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realestaterealreturn 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 2065 are associated (or correlated) with Realestaterealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realestaterealreturn has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Realestaterealreturn go up and down completely randomly.

Pair Corralation between Fidelity Freedom and Realestaterealreturn

Assuming the 90 days horizon Fidelity Freedom 2065 is expected to generate 0.65 times more return on investment than Realestaterealreturn. However, Fidelity Freedom 2065 is 1.54 times less risky than Realestaterealreturn. It trades about 0.04 of its potential returns per unit of risk. Realestaterealreturn Strategy Fund is currently generating about -0.05 per unit of risk. If you would invest  1,355  in Fidelity Freedom 2065 on October 26, 2024 and sell it today you would earn a total of  24.00  from holding Fidelity Freedom 2065 or generate 1.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Fidelity Freedom 2065  vs.  Realestaterealreturn Strategy

Fidelity Freedom 2065

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom 2065 are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Realestaterealreturn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realestaterealreturn Strategy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Realestaterealreturn 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 Realestaterealreturn

The main advantage of trading using opposite Fidelity Freedom and Realestaterealreturn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Realestaterealreturn 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 Realestaterealreturn will offset losses from the drop in Realestaterealreturn's long position.

The idea behind Fidelity Freedom 2065 and Realestaterealreturn Strategy Fund 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.