Correlation Between Growth Allocation and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Growth Allocation 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 Growth Allocation and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Allocation Index and Fidelity Freedom Blend, you can compare the effects of market volatilities on Growth Allocation 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 Growth Allocation with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Allocation and Fidelity Freedom.
Diversification Opportunities for Growth Allocation and Fidelity Freedom
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Growth and Fidelity is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Growth Allocation Index and Fidelity Freedom Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Blend and Growth Allocation 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 Growth Allocation Index 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 Blend has no effect on the direction of Growth Allocation i.e., Growth Allocation and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Growth Allocation and Fidelity Freedom
Assuming the 90 days horizon Growth Allocation is expected to generate 1.18 times less return on investment than Fidelity Freedom. But when comparing it to its historical volatility, Growth Allocation Index is 1.27 times less risky than Fidelity Freedom. It trades about 0.31 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,028 in Fidelity Freedom Blend on May 1, 2025 and sell it today you would earn a total of 116.00 from holding Fidelity Freedom Blend or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Growth Allocation Index vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Growth Allocation Index |
| Fidelity Freedom Blend |
Growth Allocation and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Allocation and Fidelity Freedom
The main advantage of trading using opposite Growth Allocation and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Allocation 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.| Growth Allocation vs. Health Care Ultrasector | Growth Allocation vs. Schwab Health Care | Growth Allocation vs. Eventide Healthcare Life | Growth Allocation vs. The Hartford Healthcare |
| Fidelity Freedom vs. Thrivent Natural Resources | Fidelity Freedom vs. Icon Natural Resources | Fidelity Freedom vs. Firsthand Alternative Energy | Fidelity Freedom vs. Gmo Resources |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |