Correlation Between Siit Large and Fidelity Freedom

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

By analyzing existing cross correlation between Siit Large Cap and Fidelity Freedom 2025, you can compare the effects of market volatilities on Siit Large 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 Siit Large with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Fidelity Freedom.

Diversification Opportunities for Siit Large and Fidelity Freedom

0.34

Correlation Coefficient

Siit Large  Fidelity Freedom

Weak diversification

The 3 months correlation between Siit and Fidelity is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Fidelity Freedom 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2025 and Siit Large 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 Siit Large Cap 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 2025 has no effect on the direction of Siit Large i.e., Siit Large and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Siit Large and Fidelity Freedom

Assuming the 90 days horizon Siit Large Cap is expected to under-perform the Fidelity Freedom. In addition to that, Siit Large is 1.84 times more volatile than Fidelity Freedom 2025. It trades about -0.08 of its total potential returns per unit of risk. Fidelity Freedom 2025 is currently generating about 0.05 per unit of volatility. If you would invest  1,378  in Fidelity Freedom 2025 on December 20, 2024 and sell it today you would earn a total of  22.00  from holding Fidelity Freedom 2025 or generate 1.6% return on investment over 90 days.

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

Siit Large Cap  vs.  Fidelity Freedom 2025

Siit Large Cap

Risk-Adjusted Performance

Very Weak

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

Fidelity Freedom 2025

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom 2025 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.

Pair Trading with Siit Large and Fidelity Freedom

The main advantage of trading using opposite Siit Large and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large 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 Siit Large Cap and Fidelity Freedom 2025 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.