Correlation Between Fidelity Puritan and Fidelity Flex
Can any of the company-specific risk be diversified away by investing in both Fidelity Puritan and Fidelity Flex 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 Puritan and Fidelity Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Puritan Fund and Fidelity Flex Freedom, you can compare the effects of market volatilities on Fidelity Puritan and Fidelity Flex 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 Puritan with a short position of Fidelity Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Puritan and Fidelity Flex.
Diversification Opportunities for Fidelity Puritan and Fidelity Flex
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Fidelity is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Puritan Fund and Fidelity Flex Freedom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Flex Freedom and Fidelity Puritan 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 Puritan Fund are associated (or correlated) with Fidelity Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Flex Freedom has no effect on the direction of Fidelity Puritan i.e., Fidelity Puritan and Fidelity Flex go up and down completely randomly.
Pair Corralation between Fidelity Puritan and Fidelity Flex
Assuming the 90 days horizon Fidelity Puritan is expected to generate 1.17 times less return on investment than Fidelity Flex. But when comparing it to its historical volatility, Fidelity Puritan Fund is 1.29 times less risky than Fidelity Flex. It trades about 0.35 of its potential returns per unit of risk. Fidelity Flex Freedom is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Fidelity Flex Freedom on April 30, 2025 and sell it today you would earn a total of 156.00 from holding Fidelity Flex Freedom or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Puritan Fund vs. Fidelity Flex Freedom
Performance |
| Timeline |
| Fidelity Puritan |
| Fidelity Flex Freedom |
Fidelity Puritan and Fidelity Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Puritan and Fidelity Flex
The main advantage of trading using opposite Fidelity Puritan and Fidelity Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Puritan position performs unexpectedly, Fidelity Flex 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 Flex will offset losses from the drop in Fidelity Flex's long position.| Fidelity Puritan vs. Versatile Bond Portfolio | Fidelity Puritan vs. Enhanced Fixed Income | Fidelity Puritan vs. The National Tax Free | Fidelity Puritan vs. Touchstone Premium Yield |
| Fidelity Flex vs. Health Care Ultrasector | Fidelity Flex vs. Highland Longshort Healthcare | Fidelity Flex vs. Fidelity Advisor Health | Fidelity Flex vs. Delaware Healthcare Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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