Correlation Between T Rowe and Inflation Protection
Can any of the company-specific risk be diversified away by investing in both T Rowe and Inflation Protection 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 Inflation Protection 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 Inflation Protection Fund, you can compare the effects of market volatilities on T Rowe and Inflation Protection 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 Inflation Protection. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Inflation Protection.
Diversification Opportunities for T Rowe and Inflation Protection
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PATFX and Inflation is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Inflation Protection Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protection 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 Inflation Protection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protection has no effect on the direction of T Rowe i.e., T Rowe and Inflation Protection go up and down completely randomly.
Pair Corralation between T Rowe and Inflation Protection
Assuming the 90 days horizon T Rowe Price is expected to generate 0.79 times more return on investment than Inflation Protection. However, T Rowe Price is 1.27 times less risky than Inflation Protection. It trades about 0.09 of its potential returns per unit of risk. Inflation Protection Fund is currently generating about 0.04 per unit of risk. If you would invest 1,008 in T Rowe Price on December 2, 2024 and sell it today you would earn a total of 123.00 from holding T Rowe Price or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. Inflation Protection Fund
Performance |
| Timeline |
| T Rowe Price |
| Inflation Protection |
T Rowe and Inflation Protection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Inflation Protection
The main advantage of trading using opposite T Rowe and Inflation Protection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Inflation Protection 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 Inflation Protection will offset losses from the drop in Inflation Protection's long position.| T Rowe vs. Franklin Adjustable Government | T Rowe vs. Bbh Intermediate Municipal | T Rowe vs. Aig Government Money | T Rowe vs. Pace Municipal Fixed |
| Inflation Protection vs. Ep Emerging Markets | Inflation Protection vs. Ab Small Cap | Inflation Protection vs. Goldman Sachs Small | Inflation Protection vs. Nt International Small Mid |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |