Correlation Between Paradigm Value and Fidelity Freedom
Can any of the company-specific risk be diversified away by investing in both Paradigm Value 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 Paradigm Value and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paradigm Value Fund and Fidelity Freedom 2015, you can compare the effects of market volatilities on Paradigm Value 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 Paradigm Value with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paradigm Value and Fidelity Freedom.
Diversification Opportunities for Paradigm Value and Fidelity Freedom
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Paradigm and Fidelity is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Paradigm Value Fund and Fidelity Freedom 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2015 and Paradigm Value 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 Paradigm Value 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 2015 has no effect on the direction of Paradigm Value i.e., Paradigm Value and Fidelity Freedom go up and down completely randomly.
Pair Corralation between Paradigm Value and Fidelity Freedom
Assuming the 90 days horizon Paradigm Value Fund is expected to generate 4.65 times more return on investment than Fidelity Freedom. However, Paradigm Value is 4.65 times more volatile than Fidelity Freedom 2015. It trades about 0.09 of its potential returns per unit of risk. Fidelity Freedom 2015 is currently generating about 0.23 per unit of risk. If you would invest 5,444 in Paradigm Value Fund on July 23, 2025 and sell it today you would earn a total of 387.00 from holding Paradigm Value Fund or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paradigm Value Fund vs. Fidelity Freedom 2015
Performance |
| Timeline |
| Paradigm Value |
| Fidelity Freedom 2015 |
Paradigm Value and Fidelity Freedom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paradigm Value and Fidelity Freedom
The main advantage of trading using opposite Paradigm Value and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paradigm Value 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.| Paradigm Value vs. T Rowe Price | Paradigm Value vs. Nuveen Large Cap | Paradigm Value vs. Live Oak Health | Paradigm Value vs. Wesmark Tactical Opportunity |
| Fidelity Freedom vs. Delaware Limited Term Diversified | Fidelity Freedom vs. Aqr Diversified Arbitrage | Fidelity Freedom vs. Manning Napier Diversified | Fidelity Freedom vs. Global Diversified Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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