Correlation Between Ab Centrated and Fidelity Freedom

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

By analyzing existing cross correlation between Ab Centrated Growth and Fidelity Freedom Index, you can compare the effects of market volatilities on Ab Centrated 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 Ab Centrated with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Centrated and Fidelity Freedom.

Diversification Opportunities for Ab Centrated and Fidelity Freedom

0.51

Correlation Coefficient

Ab Centrated  Fidelity Freedom

Very weak diversification

The 3 months correlation between WPASX and Fidelity is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ab Centrated Growth and Fidelity Freedom Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom Index and Ab Centrated 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 Ab Centrated Growth 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 Index has no effect on the direction of Ab Centrated i.e., Ab Centrated and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Ab Centrated and Fidelity Freedom

Assuming the 90 days horizon Ab Centrated is expected to generate 3.25 times less return on investment than Fidelity Freedom. In addition to that, Ab Centrated is 1.46 times more volatile than Fidelity Freedom Index. It trades about 0.05 of its total potential returns per unit of risk. Fidelity Freedom Index is currently generating about 0.23 per unit of volatility. If you would invest  2,696  in Fidelity Freedom Index on May 10, 2025 and sell it today you would earn a total of  216.00  from holding Fidelity Freedom Index or generate 8.01% return on investment over 90 days.

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

Ab Centrated Growth  vs.  Fidelity Freedom Index

Ab Centrated Growth

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Centrated Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Centrated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Freedom Index

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom Index are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Freedom may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ab Centrated and Fidelity Freedom

The main advantage of trading using opposite Ab Centrated and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Centrated 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.

The idea behind Ab Centrated Growth and Fidelity Freedom Index 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.