Correlation Between Fidelity Freedom and One Choice

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Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and One Choice 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 One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2020 and One Choice Blend, you can compare the effects of market volatilities on Fidelity Freedom and One Choice 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 One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and One Choice.

Diversification Opportunities for Fidelity Freedom and One Choice

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Fidelity and AAAOX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2020 and One Choice Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice Blend 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 2020 are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice Blend has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and One Choice go up and down completely randomly.

Pair Corralation between Fidelity Freedom and One Choice

Assuming the 90 days horizon Fidelity Freedom 2020 is expected to under-perform the One Choice. In addition to that, Fidelity Freedom is 1.06 times more volatile than One Choice Blend. It trades about -0.25 of its total potential returns per unit of risk. One Choice Blend is currently generating about -0.22 per unit of volatility. If you would invest  951.00  in One Choice Blend on March 28, 2022 and sell it today you would lose (39.00)  from holding One Choice Blend or give up 4.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Fidelity Freedom 2020  vs.  One Choice Blend

 Performance (%) 
      Timeline 
Fidelity Freedom 2020 
Fidelity Performance
0 of 100
Over the last 90 days Fidelity Freedom 2020 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Fidelity Price Channel

One Choice Blend 
AAAOX Performance
0 of 100
Over the last 90 days One Choice Blend has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

AAAOX Price Channel

Fidelity Freedom and One Choice Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Fidelity Freedom and One Choice

The main advantage of trading using opposite Fidelity Freedom and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.

Fidelity Freedom 2020

Pair trading matchups for Fidelity Freedom

The idea behind Fidelity Freedom 2020 and One Choice Blend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

One Choice Blend

Pair trading matchups for One Choice

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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