Correlation Between Fidelity Freedom and Jpmorgan Smartretirement*

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

By analyzing existing cross correlation between Fidelity Freedom 2025 and Jpmorgan Smartretirement Blend, you can compare the effects of market volatilities on Fidelity Freedom and Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement*. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Jpmorgan Smartretirement*.

Diversification Opportunities for Fidelity Freedom and Jpmorgan Smartretirement*

0.9

Correlation Coefficient

Fidelity Freedom  Jpmorgan Smartretirement*

Almost no diversification

The 3 months correlation between Fidelity and Jpmorgan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2025 and Jpmorgan Smartretirement Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement* 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 2025 are associated (or correlated) with Jpmorgan Smartretirement*. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement* has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Jpmorgan Smartretirement* go up and down completely randomly.

Pair Corralation between Fidelity Freedom and Jpmorgan Smartretirement*

Assuming the 90 days horizon Fidelity Freedom 2025 is expected to under-perform the Jpmorgan Smartretirement*. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Freedom 2025 is 1.02 times less risky than Jpmorgan Smartretirement*. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Jpmorgan Smartretirement Blend is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest  2,441  in Jpmorgan Smartretirement Blend on October 9, 2024 and sell it today you would lose (130.00) from holding Jpmorgan Smartretirement Blend or give up 5.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Freedom 2025  vs.  Jpmorgan Smartretirement Blend

Fidelity Freedom 2025

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Freedom 2025 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.

Jpmorgan Smartretirement*

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Smartretirement Blend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Smartretirement* 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 Jpmorgan Smartretirement*

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

The idea behind Fidelity Freedom 2025 and Jpmorgan Smartretirement Blend 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.