Correlation Between T Rowe and Cadence Bancorp

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

Diversification Opportunities for T Rowe and Cadence Bancorp

0.62

Correlation Coefficient

T Rowe  Cadence Bancorp

Poor diversification

The 3 months correlation between PRHSX and Cadence is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Cadence Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Bancorp 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 Cadence Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Bancorp has no effect on the direction of T Rowe i.e., T Rowe and Cadence Bancorp go up and down completely randomly.

Pair Corralation between T Rowe and Cadence Bancorp

Assuming the 90 days horizon T Rowe is expected to generate 4.79 times less return on investment than Cadence Bancorp. But when comparing it to its historical volatility, T Rowe Price is 1.75 times less risky than Cadence Bancorp. It trades about 0.14 of its potential returns per unit of risk. Cadence Bancorp is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  3,841  in Cadence Bancorp on September 15, 2025 and sell it today you would earn a total of  537.00  from holding Cadence Bancorp or generate 13.98% return on investment over 90 days.

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

T Rowe Price  vs.  Cadence Bancorp

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 23 (%) of all funds and portfolios of funds 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.

Cadence Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Cadence Bancorp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with T Rowe and Cadence Bancorp

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

The idea behind T Rowe Price and Cadence Bancorp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.