Correlation Between T Rowe and Allianzgi Small-cap

Can any of the company-specific risk be diversified away by investing in both T Rowe and Allianzgi Small-cap 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 Allianzgi Small-cap 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 Allianzgi Small Cap Fund, you can compare the effects of market volatilities on T Rowe and Allianzgi Small-cap 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 Allianzgi Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Allianzgi Small-cap.

Diversification Opportunities for T Rowe and Allianzgi Small-cap

0.85

Correlation Coefficient

T Rowe  Allianzgi Small-cap

Very poor diversification

The 3 months correlation between PRDMX and Allianzgi is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Allianzgi Small Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Small Cap 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 Allianzgi Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Small Cap has no effect on the direction of T Rowe i.e., T Rowe and Allianzgi Small-cap go up and down completely randomly.

Pair Corralation between T Rowe and Allianzgi Small-cap

Assuming the 90 days horizon T Rowe is expected to generate 2.62 times less return on investment than Allianzgi Small-cap. But when comparing it to its historical volatility, T Rowe Price is 1.13 times less risky than Allianzgi Small-cap. It trades about 0.08 of its potential returns per unit of risk. Allianzgi Small Cap Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,335  in Allianzgi Small Cap Fund on July 1, 2025 and sell it today you would earn a total of  261.00  from holding Allianzgi Small Cap Fund or generate 11.18% 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.  Allianzgi Small Cap Fund

T Rowe Price

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Small Cap Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Allianzgi Small-cap may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with T Rowe and Allianzgi Small-cap

The main advantage of trading using opposite T Rowe and Allianzgi Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Allianzgi Small-cap 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 Allianzgi Small-cap will offset losses from the drop in Allianzgi Small-cap's long position.

The idea behind T Rowe Price and Allianzgi Small Cap Fund 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.