Correlation Between T Rowe and State Street
Can any of the company-specific risk be diversified away by investing in both T Rowe and State Street 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 State Street 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 State Street Aggregate, you can compare the effects of market volatilities on T Rowe and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and State Street.
Diversification Opportunities for T Rowe and State Street
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCLIX and State is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and State Street Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Aggregate 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Aggregate has no effect on the direction of T Rowe i.e., T Rowe and State Street go up and down completely randomly.
Pair Corralation between T Rowe and State Street
Assuming the 90 days horizon T Rowe Price is expected to generate 2.05 times more return on investment than State Street. However, T Rowe is 2.05 times more volatile than State Street Aggregate. It trades about 0.34 of its potential returns per unit of risk. State Street Aggregate is currently generating about 0.15 per unit of risk. If you would invest 4,321 in T Rowe Price on September 3, 2024 and sell it today you would earn a total of 230.00 from holding T Rowe Price or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. State Street Aggregate
Performance |
| Timeline |
| T Rowe Price |
| State Street Aggregate |
T Rowe and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and State Street
The main advantage of trading using opposite T Rowe and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| T Rowe vs. John Hancock Financial | T Rowe vs. Gabelli Global Financial | T Rowe vs. Vanguard Financials Index | T Rowe vs. Goldman Sachs Financial |
| State Street vs. Boston Partners Small | State Street vs. American Century Etf | State Street vs. Victory Rs Partners | State Street vs. Lord Abbett Small |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |