Correlation Between T Rowe and Dimensional International

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

Diversification Opportunities for T Rowe and Dimensional International

0.44

Correlation Coefficient

T Rowe  Dimensional International

Very weak diversification

The 3 months correlation between TCAF and Dimensional is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Dimensional International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International 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 Dimensional International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of T Rowe i.e., T Rowe and Dimensional International go up and down completely randomly.

Pair Corralation between T Rowe and Dimensional International

Given the investment horizon of 90 days T Rowe Price is expected to generate 1.0 times more return on investment than Dimensional International. However, T Rowe Price is 1.0 times less risky than Dimensional International. It trades about 0.26 of its potential returns per unit of risk. Dimensional International High is currently generating about 0.11 per unit of risk. If you would invest  3,246  in T Rowe Price on May 8, 2025 and sell it today you would earn a total of  390.00  from holding T Rowe Price or generate 12.01% return on investment over 90 days.

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

T Rowe Price  vs.  Dimensional International High

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 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Dimensional International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional International High are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Dimensional International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with T Rowe and Dimensional International

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

The idea behind T Rowe Price and Dimensional International High 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 Transaction History module to view history of all your transactions and understand their impact on performance.