Correlation Between Sterling Capital and T Rowe

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

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

Diversification Opportunities for Sterling Capital and T Rowe

0.28

Correlation Coefficient

Sterling Capital  T Rowe

Modest diversification

The 3 months correlation between Sterling and RPGEX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Equity 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 Sterling Capital 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 Sterling Capital Equity 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 Sterling Capital i.e., Sterling Capital and T Rowe go up and down completely randomly.

Pair Corralation between Sterling Capital and T Rowe

Assuming the 90 days horizon Sterling Capital Equity is expected to under-perform the T Rowe. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sterling Capital Equity is 1.2 times less risky than T Rowe. The mutual fund trades about -0.02 of its potential returns per unit of risk. The T Rowe Price is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,615  in T Rowe Price on July 22, 2025 and sell it today you would earn a total of  233.00  from holding T Rowe Price or generate 5.05% return on investment over 90 days.

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

Sterling Capital Equity  vs.  T Rowe Price

Sterling Capital Equity

Risk-Adjusted Performance

Weakest

Over the last 90 days Sterling Capital Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Sterling Capital 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

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Sterling Capital and T Rowe

The main advantage of trading using opposite Sterling Capital and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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 Sterling Capital Equity 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.