Correlation Between T Rowe and Mining Global

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

Diversification Opportunities for T Rowe and Mining Global

-0.07

Correlation Coefficient

T Rowe  Mining Global

Good diversification

The 3 months correlation between RRTLX and Mining is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Mining Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mining Global 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 Mining Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mining Global has no effect on the direction of T Rowe i.e., T Rowe and Mining Global go up and down completely randomly.

Pair Corralation between T Rowe and Mining Global

Assuming the 90 days horizon T Rowe is expected to generate 301.62 times less return on investment than Mining Global. But when comparing it to its historical volatility, T Rowe Price is 435.72 times less risky than Mining Global. It trades about 0.14 of its potential returns per unit of risk. Mining Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Mining Global on September 5, 2024 and sell it today you would lose (0.01) from holding Mining Global or give up 100.0% of portfolio value over 90 days.

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

T Rowe Price  vs.  Mining Global

T Rowe Price

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 11 (%) 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.

Mining Global

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mining Global are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mining Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Rowe and Mining Global

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

The idea behind T Rowe Price and Mining Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.