Correlation Between Capital One and T Rowe

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

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

Diversification Opportunities for Capital One and T Rowe

0.85

Correlation Coefficient

Capital One  T Rowe

Very poor diversification

The 3 months correlation between Capital and TROW is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial 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 Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and T Rowe go up and down completely randomly.

Pair Corralation between Capital One and T Rowe

Considering the 90-day investment horizon Capital One is expected to generate 1.24 times less return on investment than T Rowe. In addition to that, Capital One is 1.25 times more volatile than T Rowe Price. It trades about 0.11 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.18 per unit of volatility. If you would invest  8,895  in T Rowe Price on May 6, 2025 and sell it today you would earn a total of  1,411  from holding T Rowe Price or generate 15.86% return on investment over 90 days.

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

Capital One Financial  vs.  T Rowe Price

Capital One Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Capital One may actually be approaching a critical reversion point that can send shares even higher in September 2025.

T Rowe Price

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, T Rowe showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital One and T Rowe

The main advantage of trading using opposite Capital One and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One 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 Capital One Financial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.