Correlation Between Grab Holdings and T Rowe

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

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

Diversification Opportunities for Grab Holdings and T Rowe

0.01

Correlation Coefficient

Grab Holdings  T Rowe

Significant diversification

The 3 months correlation between Grab and RRTLX is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grab Holdings and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Grab Holdings 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 Grab Holdings are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Grab Holdings i.e., Grab Holdings and T Rowe go up and down completely randomly.

Pair Corralation between Grab Holdings and T Rowe

Given the investment horizon of 90 days Grab Holdings is expected to under-perform the T Rowe. In addition to that, Grab Holdings is 2.68 times more volatile than T Rowe Price. It trades about -0.2 of its total potential returns per unit of risk. T Rowe Price is currently generating about -0.36 per unit of volatility. If you would invest  1,273  in T Rowe Price on October 1, 2024 and sell it today you would lose (65.00) from holding T Rowe Price or give up 5.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Grab Holdings  vs.  T Rowe Price

Grab Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grab Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Grab Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

T Rowe Price

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Grab Holdings and T Rowe

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

The idea behind Grab Holdings and T Rowe Price 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.