Correlation Between Fidelity Freedom and Delaware Emerging

Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Delaware Emerging 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 Delaware Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Freedom Index and Delaware Emerging Markets, you can compare the effects of market volatilities on Fidelity Freedom and Delaware Emerging 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 Delaware Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Delaware Emerging.

Diversification Opportunities for Fidelity Freedom and Delaware Emerging

0.92

Correlation Coefficient

Fidelity Freedom  Delaware Emerging

Almost no diversification

The 3 months correlation between Fidelity and Delaware is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets 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 Index are associated (or correlated) with Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Delaware Emerging go up and down completely randomly.

Pair Corralation between Fidelity Freedom and Delaware Emerging

Assuming the 90 days horizon Fidelity Freedom is expected to generate 8.83 times less return on investment than Delaware Emerging. But when comparing it to its historical volatility, Fidelity Freedom Index is 5.56 times less risky than Delaware Emerging. It trades about 0.17 of its potential returns per unit of risk. Delaware Emerging Markets is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  2,598  in Delaware Emerging Markets on August 12, 2025 and sell it today you would earn a total of  837.00  from holding Delaware Emerging Markets or generate 32.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Freedom Index  vs.  Delaware Emerging Markets

Fidelity Freedom Index

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom Index are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Delaware Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Emerging Markets are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Delaware Emerging showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Freedom and Delaware Emerging

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

The idea behind Fidelity Freedom Index and Delaware Emerging Markets 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.