Correlation Between Icon Financial and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Icon Financial 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 Icon Financial and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Financial Fund and Fidelity Freedom 2015, you can compare the effects of market volatilities on Icon Financial 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 Icon Financial with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Fidelity Freedom.
Diversification Opportunities for Icon Financial and Fidelity Freedom
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and Fidelity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund 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 Icon Financial 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 Icon Financial Fund 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 Icon Financial i.e., Icon Financial and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Icon Financial and Fidelity Freedom
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Fidelity Freedom. In addition to that, Icon Financial is 2.62 times more volatile than Fidelity Freedom 2015. It trades about -0.04 of its total potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about 0.09 per unit of volatility. If you would invest 1,135 in Fidelity Freedom 2015 on December 28, 2024 and sell it today you would earn a total of 23.00 from holding Fidelity Freedom 2015 or generate 2.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Icon Financial Fund vs. Fidelity Freedom 2015
Performance |
Timeline |
Icon Financial |
Fidelity Freedom 2015 |
Icon Financial and Fidelity Freedom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Icon Financial and Fidelity Freedom
The main advantage of trading using opposite Icon Financial and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial 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.Icon Financial vs. Dws Global Macro | Icon Financial vs. Franklin Mutual Global | Icon Financial vs. Aqr Global Equity | Icon Financial vs. Ab Global Bond |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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