Correlation Between Fidelity Freedom and Fidelity Strategic
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Fidelity Strategic 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 Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom Blend and Fidelity Strategic Dividend, you can compare the effects of market volatilities on Fidelity Freedom and Fidelity Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Fidelity Strategic.
Diversification Opportunities for Fidelity Freedom and Fidelity Strategic
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Fidelity is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Blend and Fidelity Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Strategic 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 Blend are associated (or correlated) with Fidelity Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Strategic has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Fidelity Strategic go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Fidelity Strategic
Assuming the 90 days horizon Fidelity Freedom Blend is expected to under-perform the Fidelity Strategic. In addition to that, Fidelity Freedom is 1.44 times more volatile than Fidelity Strategic Dividend. It trades about -0.08 of its total potential returns per unit of risk. Fidelity Strategic Dividend is currently generating about -0.12 per unit of volatility. If you would invest 1,841 in Fidelity Strategic Dividend on August 20, 2025 and sell it today you would lose (23.00) from holding Fidelity Strategic Dividend or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fidelity Freedom Blend vs. Fidelity Strategic Dividend
Performance |
| Timeline |
| Fidelity Freedom Blend |
| Fidelity Strategic |
Fidelity Freedom and Fidelity Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Fidelity Strategic
The main advantage of trading using opposite Fidelity Freedom and Fidelity Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Fidelity Strategic 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 Strategic will offset losses from the drop in Fidelity Strategic's long position.| Fidelity Freedom vs. Lord Abbett Health | Fidelity Freedom vs. Vanguard Health Care | Fidelity Freedom vs. Delaware Healthcare Fund | Fidelity Freedom vs. Health Care Ultrasector |
| Fidelity Strategic vs. Nuveen Preferred Securities | Fidelity Strategic vs. Fidelity New Markets | Fidelity Strategic vs. The Hartford Equity | Fidelity Strategic vs. Fidelity Asset Manager |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |