Correlation Between Dreyfus Large and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Dreyfus 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 Dreyfus 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 Dreyfus Large Cap and Fidelity Freedom Index, you can compare the effects of market volatilities on Dreyfus 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 Dreyfus Large with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus Large and Fidelity Freedom.
Diversification Opportunities for Dreyfus Large and Fidelity Freedom
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dreyfus and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Large Cap and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Dreyfus 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 Dreyfus 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 Index has no effect on the direction of Dreyfus Large i.e., Dreyfus Large and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Dreyfus Large and Fidelity Freedom
Assuming the 90 days horizon Dreyfus Large Cap is expected to generate 1.25 times more return on investment than Fidelity Freedom. However, Dreyfus Large is 1.25 times more volatile than Fidelity Freedom Index. It trades about 0.08 of its potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.08 per unit of risk. If you would invest 1,143 in Dreyfus Large Cap on June 5, 2025 and sell it today you would earn a total of 497.00 from holding Dreyfus Large Cap or generate 43.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dreyfus Large Cap vs. Fidelity Freedom Index
Performance |
| Timeline |
| Dreyfus Large Cap |
| Fidelity Freedom Index |
Dreyfus Large and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus Large and Fidelity Freedom
The main advantage of trading using opposite Dreyfus Large and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus 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.| Dreyfus Large vs. Dreyfus High Yield | Dreyfus Large vs. Dreyfus International Bond | Dreyfus Large vs. Dreyfus International Bond | Dreyfus Large vs. Dreyfus International Equity |
| Fidelity Freedom vs. Elfun Diversified Fund | Fidelity Freedom vs. Invesco Diversified Dividend | Fidelity Freedom vs. Aqr Diversified Arbitrage | Fidelity Freedom vs. Victory Diversified Stock |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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