Correlation Between Fidelity Freedom and Fidelity Select
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Select 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 Fidelity Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2015 and Fidelity Select Semiconductors, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Select 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 Fidelity Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Select.
Diversification Opportunities for Fidelity Freedom and Fidelity Select
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2015 and Fidelity Select Semiconductors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Select Semi 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 2015 are associated (or correlated) with Fidelity Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Select Semi has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Select go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Select
Assuming the 90 days horizon Fidelity Freedom is expected to generate 3.73 times less return on investment than Fidelity Select. But when comparing it to its historical volatility, Fidelity Freedom 2015 is 5.61 times less risky than Fidelity Select. It trades about 0.1 of its potential returns per unit of risk. Fidelity Select Semiconductors is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,939 in Fidelity Select Semiconductors on June 6, 2025 and sell it today you would earn a total of 1,756 from holding Fidelity Select Semiconductors or generate 90.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom 2015 vs. Fidelity Select Semiconductors
Performance |
| Timeline |
| Fidelity Freedom 2015 |
| Fidelity Select Semi |
Fidelity Freedom and Fidelity Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Select
The main advantage of trading using opposite Fidelity Freedom and Fidelity Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Select 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 Select will offset losses from the drop in Fidelity Select's long position.| Fidelity Freedom vs. Financial Services Portfolio | Fidelity Freedom vs. 1919 Financial Services | Fidelity Freedom vs. Angel Oak Financial | Fidelity Freedom vs. Mesirow Financial Small |
| Fidelity Select vs. Technology Portfolio Technology | Fidelity Select vs. Software And It | Fidelity Select vs. Computers Portfolio Puters | Fidelity Select vs. Health Care Portfolio |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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