Correlation Between Federated Prudent and T Rowe

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

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

Diversification Opportunities for Federated Prudent and T Rowe

-0.72

Correlation Coefficient

Federated Prudent  T Rowe

Pay attention - limited upside

The 3 months correlation between Federated and PRSAX is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear 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 Federated Prudent 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 Federated Prudent Bear 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 Federated Prudent i.e., Federated Prudent and T Rowe go up and down completely randomly.

Pair Corralation between Federated Prudent and T Rowe

Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the T Rowe. In addition to that, Federated Prudent is 4.26 times more volatile than T Rowe Price. It trades about -0.18 of its total potential returns per unit of risk. T Rowe Price is currently generating about 0.23 per unit of volatility. If you would invest  990.00  in T Rowe Price on July 9, 2025 and sell it today you would earn a total of  18.00  from holding T Rowe Price or generate 1.82% return on investment over 90 days.

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

Federated Prudent Bear  vs.  T Rowe Price

Federated Prudent Bear

Risk-Adjusted Performance

Weakest

Over the last 90 days Federated Prudent Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Federated Prudent 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. 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 Federated Prudent and T Rowe

The main advantage of trading using opposite Federated Prudent and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Prudent 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 Federated Prudent Bear 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.