Correlation Between Fidelity Freedom and Jpmorgan Smartretirement
Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Freedom 2035 and Jpmorgan Smartretirement 2035, you can compare the effects of market volatilities on Fidelity Freedom and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Jpmorgan Smartretirement.
Diversification Opportunities for Fidelity Freedom and Jpmorgan Smartretirement
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Fidelity and Jpmorgan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom 2035 and Jpmorgan Smartretirement 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement 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 2035 are associated (or correlated) with Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between Fidelity Freedom and Jpmorgan Smartretirement
Assuming the 90 days horizon Fidelity Freedom 2035 is expected to under-perform the Jpmorgan Smartretirement. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity Freedom 2035 is 1.0 times less risky than Jpmorgan Smartretirement. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Jpmorgan Smartretirement 2035 is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 1,954 in Jpmorgan Smartretirement 2035 on January 26, 2024 and sell it today you would lose (41.00) from holding Jpmorgan Smartretirement 2035 or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Freedom 2035 vs. Jpmorgan Smartretirement 2035
Performance |
| Timeline |
| Fidelity Freedom 2035 |
| Jpmorgan Smartretirement |
Fidelity Freedom and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Freedom and Jpmorgan Smartretirement
The main advantage of trading using opposite Fidelity Freedom and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Freedom position performs unexpectedly, Jpmorgan Smartretirement 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 Jpmorgan Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.| Fidelity Freedom vs. Fidelity Freedom 2015 | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Puritan Fund | Fidelity Freedom vs. Fidelity Pennsylvania Municipal |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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