Correlation Between Catalyst/map Global and T Rowe

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

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

Diversification Opportunities for Catalyst/map Global and T Rowe

0.35

Correlation Coefficient

Catalyst/map Global  T Rowe

Weak diversification

The 3 months correlation between Catalyst/map and TRRZX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Balanced 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 Catalyst/map Global 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 Catalystmap Global Balanced 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 Catalyst/map Global i.e., Catalyst/map Global and T Rowe go up and down completely randomly.

Pair Corralation between Catalyst/map Global and T Rowe

Assuming the 90 days horizon Catalystmap Global Balanced is expected to generate 0.38 times more return on investment than T Rowe. However, Catalystmap Global Balanced is 2.66 times less risky than T Rowe. It trades about 0.15 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.0 per unit of risk. If you would invest  1,126  in Catalystmap Global Balanced on December 30, 2024 and sell it today you would earn a total of  34.00  from holding Catalystmap Global Balanced or generate 3.02% return on investment over 90 days.

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

Catalystmap Global Balanced  vs.  T Rowe Price

Catalyst/map Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmap Global Balanced are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst/map Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

T Rowe Price

Risk-Adjusted Performance

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 basic 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 Catalyst/map Global and T Rowe

The main advantage of trading using opposite Catalyst/map Global and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst/map Global 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 Catalystmap Global Balanced 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.