Correlation Between Fidelity Freedom and Defense And

Can any of the company-specific risk be diversified away by investing in both Fidelity Freedom and Defense And 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 Defense And 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 Defense And Aerospace, you can compare the effects of market volatilities on Fidelity Freedom and Defense And 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 Defense And. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Freedom and Defense And.

Diversification Opportunities for Fidelity Freedom and Defense And

0.94

Correlation Coefficient

Fidelity Freedom  Defense And

Almost no diversification

The 3 months correlation between Fidelity and Defense is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Freedom Index and Defense And Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defense And Aerospace 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 Defense And. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defense And Aerospace has no effect on the direction of Fidelity Freedom i.e., Fidelity Freedom and Defense And go up and down completely randomly.

Pair Corralation between Fidelity Freedom and Defense And

Assuming the 90 days horizon Fidelity Freedom Index is expected to generate 0.62 times more return on investment than Defense And. However, Fidelity Freedom Index is 1.63 times less risky than Defense And. It trades about 0.15 of its potential returns per unit of risk. Defense And Aerospace is currently generating about 0.08 per unit of risk. If you would invest  2,905  in Fidelity Freedom Index on August 11, 2025 and sell it today you would earn a total of  170.00  from holding Fidelity Freedom Index or generate 5.85% 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.  Defense And Aerospace

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 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Defense And Aerospace

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Defense And Aerospace are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Defense And is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Freedom and Defense And

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

The idea behind Fidelity Freedom Index and Defense And Aerospace 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.