Correlation Between T Rowe and Antilles Gold

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

Diversification Opportunities for T Rowe and Antilles Gold

0.53

Correlation Coefficient

T Rowe  Antilles Gold

Very weak diversification

The 3 months correlation between RRTLX and Antilles is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Antilles Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antilles Gold Limited 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 Antilles Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antilles Gold Limited has no effect on the direction of T Rowe i.e., T Rowe and Antilles Gold go up and down completely randomly.

Pair Corralation between T Rowe and Antilles Gold

Assuming the 90 days horizon T Rowe Price is expected to under-perform the Antilles Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, T Rowe Price is 68.22 times less risky than Antilles Gold. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Antilles Gold Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Antilles Gold Limited on December 29, 2024 and sell it today you would lose (0.10) from holding Antilles Gold Limited or give up 25.0% of portfolio value over 90 days.

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

T Rowe Price  vs.  Antilles Gold Limited

T Rowe Price

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 3 (%) 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.

Antilles Gold Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Antilles Gold Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Antilles Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Rowe and Antilles Gold

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

The idea behind T Rowe Price and Antilles Gold Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.