Correlation Between Technology Portfolio and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Technology Portfolio 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 Technology Portfolio and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology Portfolio Technology and Fidelity Freedom Blend, you can compare the effects of market volatilities on Technology Portfolio 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 Technology Portfolio with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Portfolio and Fidelity Freedom.
Diversification Opportunities for Technology Portfolio and Fidelity Freedom
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Technology and Fidelity is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Technology Portfolio Technolog 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 Technology Portfolio 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 Technology Portfolio Technology 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 Technology Portfolio i.e., Technology Portfolio and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Technology Portfolio and Fidelity Freedom
Assuming the 90 days horizon Technology Portfolio Technology is expected to generate 2.04 times more return on investment than Fidelity Freedom. However, Technology Portfolio is 2.04 times more volatile than Fidelity Freedom Blend. It trades about 0.12 of its potential returns per unit of risk. Fidelity Freedom Blend is currently generating about 0.1 per unit of risk. If you would invest 3,776 in Technology Portfolio Technology on September 4, 2025 and sell it today you would earn a total of 401.00 from holding Technology Portfolio Technology or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technology Portfolio Technolog vs. Fidelity Freedom Blend
Performance |
| Timeline |
| Technology Portfolio |
| Fidelity Freedom Blend |
Technology Portfolio and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology Portfolio and Fidelity Freedom
The main advantage of trading using opposite Technology Portfolio and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Portfolio 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.| Technology Portfolio vs. Georgia Tax Free Bond | Technology Portfolio vs. Ambrus Core Bond | Technology Portfolio vs. Intermediate Term Bond Fund | Technology Portfolio vs. Transamerica Intermediate Muni |
| Fidelity Freedom vs. Ultramid Cap Profund Ultramid Cap | Fidelity Freedom vs. Mid Cap Value Profund | Fidelity Freedom vs. Small Cap Growth Profund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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