Correlation Between T Rowe and St James

Can any of the company-specific risk be diversified away by investing in both T Rowe and St James 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 T Rowe and St James into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T Rowe Price and St James Gold, you can compare the effects of market volatilities on T Rowe and St James 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 T Rowe with a short position of St James. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and St James.

Diversification Opportunities for T Rowe and St James

0.1

Correlation Coefficient

T Rowe  St James

Average diversification

The 3 months correlation between RRTLX and LRDJF is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and St James Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St James Gold and T Rowe 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 T Rowe Price are associated (or correlated) with St James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St James Gold has no effect on the direction of T Rowe i.e., T Rowe and St James go up and down completely randomly.

Pair Corralation between T Rowe and St James

Assuming the 90 days horizon T Rowe Price is expected to generate 0.03 times more return on investment than St James. However, T Rowe Price is 38.44 times less risky than St James. It trades about 0.34 of its potential returns per unit of risk. St James Gold is currently generating about -0.06 per unit of risk. If you would invest  1,245  in T Rowe Price on September 3, 2024 and sell it today you would earn a total of  26.00  from holding T Rowe Price or generate 2.09% return on investment over 90 days.

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

T Rowe Price  vs.  St James Gold

T Rowe Price

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

St James Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in St James Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking indicators, St James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Rowe and St James

The main advantage of trading using opposite T Rowe and St James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, St James 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 St James will offset losses from the drop in St James' long position.

The idea behind T Rowe Price and St James Gold 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.