Correlation Between Fidelity Worldwide and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Fidelity Worldwide 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 Fidelity Worldwide and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Worldwide Fund and Fidelity Freedom 2045, you can compare the effects of market volatilities on Fidelity Worldwide 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 Fidelity Worldwide with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Worldwide and Fidelity Freedom.
Diversification Opportunities for Fidelity Worldwide and Fidelity Freedom
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Fidelity is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Worldwide Fund and Fidelity Freedom 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2045 and Fidelity Worldwide 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 Worldwide Fund 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 2045 has no effect on the direction of Fidelity Worldwide i.e., Fidelity Worldwide and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Fidelity Worldwide and Fidelity Freedom
Assuming the 90 days horizon Fidelity Worldwide Fund is expected to generate 1.54 times more return on investment than Fidelity Freedom. However, Fidelity Worldwide is 1.54 times more volatile than Fidelity Freedom 2045. It trades about 0.1 of its potential returns per unit of risk. Fidelity Freedom 2045 is currently generating about 0.14 per unit of risk. If you would invest 3,798 in Fidelity Worldwide Fund on September 2, 2025 and sell it today you would earn a total of 254.00 from holding Fidelity Worldwide Fund or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Worldwide Fund vs. Fidelity Freedom 2045
Performance |
| Timeline |
| Fidelity Worldwide |
| Fidelity Freedom 2045 |
Fidelity Worldwide and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Worldwide and Fidelity Freedom
The main advantage of trading using opposite Fidelity Worldwide and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Worldwide 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.| Fidelity Worldwide vs. Fidelity Freedom 2015 | Fidelity Worldwide vs. Fidelity Puritan Fund | Fidelity Worldwide vs. Fidelity Puritan Fund | Fidelity Worldwide vs. Fidelity Pennsylvania Municipal |
| Fidelity Freedom vs. Alpine High Yield | Fidelity Freedom vs. Blackrock High Income | Fidelity Freedom vs. Ab High Income | Fidelity Freedom vs. Federated Municipal High |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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