Correlation Between T Rowe and Xinjiang Goldwind

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

Diversification Opportunities for T Rowe and Xinjiang Goldwind

0.41

Correlation Coefficient

T Rowe  Xinjiang Goldwind

Very weak diversification

The 3 months correlation between RRTLX and Xinjiang is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of T Rowe i.e., T Rowe and Xinjiang Goldwind go up and down completely randomly.

Pair Corralation between T Rowe and Xinjiang Goldwind

Assuming the 90 days horizon T Rowe is expected to generate 13.51 times less return on investment than Xinjiang Goldwind. But when comparing it to its historical volatility, T Rowe Price is 16.44 times less risky than Xinjiang Goldwind. It trades about 0.13 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  42.00  in Xinjiang Goldwind Science on September 12, 2024 and sell it today you would earn a total of  49.00  from holding Xinjiang Goldwind Science or generate 116.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.06%
Values	Daily Returns

T Rowe Price  vs.  Xinjiang Goldwind Science

T Rowe Price

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 9 (%) 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.

Xinjiang Goldwind Science

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xinjiang Goldwind Science are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Xinjiang Goldwind reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Rowe and Xinjiang Goldwind

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

The idea behind T Rowe Price and Xinjiang Goldwind Science 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.