Correlation Between Fidelity Intermediate and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Intermediate 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 Intermediate 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 Intermediate Municipal and Fidelity Freedom 2015, you can compare the effects of market volatilities on Fidelity Intermediate 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 Intermediate with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Intermediate and Fidelity Freedom.
Diversification Opportunities for Fidelity Intermediate and Fidelity Freedom
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Intermediate Municipa and Fidelity Freedom 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2015 and Fidelity Intermediate 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 Intermediate Municipal 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 2015 has no effect on the direction of Fidelity Intermediate i.e., Fidelity Intermediate and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Intermediate and Fidelity Freedom
Assuming the 90 days horizon Fidelity Intermediate Municipal is expected to generate 0.54 times more return on investment than Fidelity Freedom. However, Fidelity Intermediate Municipal is 1.85 times less risky than Fidelity Freedom. It trades about -0.17 of its potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about -0.18 per unit of risk. If you would invest 1,013 in Fidelity Intermediate Municipal on September 25, 2024 and sell it today you would lose (8.00) from holding Fidelity Intermediate Municipal or give up 0.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.24% |
Values | Daily Returns |
Fidelity Intermediate Municipa vs. Fidelity Freedom 2015
Performance |
Timeline |
Fidelity Intermediate |
Fidelity Freedom 2015 |
Fidelity Intermediate and Fidelity Freedom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fidelity Intermediate and Fidelity Freedom
The main advantage of trading using opposite Fidelity Intermediate and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Intermediate 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.Fidelity Intermediate vs. Fidelity Freedom 2015 | Fidelity Intermediate vs. Fidelity Puritan Fund | Fidelity Intermediate vs. Fidelity Puritan Fund | Fidelity Intermediate vs. Fidelity Pennsylvania Municipal |
Fidelity Freedom vs. Invesco Technology Fund | Fidelity Freedom vs. Blackrock Science Technology | Fidelity Freedom vs. Red Oak Technology | Fidelity Freedom vs. Vanguard 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |