Correlation Between Fidelity Freedom and Vanguard Short
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Vanguard Short 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 Vanguard Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Index and Vanguard Short Term Treasury, you can compare the effects of market volatilities on Fidelity Freedom and Vanguard Short 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 Vanguard Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Vanguard Short.
Diversification Opportunities for Fidelity Freedom and Vanguard Short
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Vanguard is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Vanguard Short Term Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Short Term 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 Index are associated (or correlated) with Vanguard Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Short Term has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Vanguard Short go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Vanguard Short
Assuming the 90 days horizon Fidelity Freedom Index is expected to under-perform the Vanguard Short. In addition to that, Fidelity Freedom is 9.33 times more volatile than Vanguard Short Term Treasury. It trades about -0.01 of its total potential returns per unit of risk. Vanguard Short Term Treasury is currently generating about 0.26 per unit of volatility. If you would invest 5,815 in Vanguard Short Term Treasury on October 6, 2025 and sell it today you would earn a total of 60.00 from holding Vanguard Short Term Treasury or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom Index vs. Vanguard Short Term Treasury
Performance |
| Timeline |
| Fidelity Freedom Index |
| Vanguard Short Term |
Fidelity Freedom and Vanguard Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Vanguard Short
The main advantage of trading using opposite Fidelity Freedom and Vanguard Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Vanguard Short 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 Vanguard Short will offset losses from the drop in Vanguard Short's long position.| Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index | Fidelity Freedom vs. Fidelity Freedom Index |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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