Correlation Between T Rowe and Catalyst/exceed Defined

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

Diversification Opportunities for T Rowe and Catalyst/exceed Defined

0.96

Correlation Coefficient

T Rowe  Catalyst/exceed Defined

Almost no diversification

The 3 months correlation between TMSRX and Catalyst/exceed is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Catalystexceed Defined Shield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst/exceed Defined 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 Catalyst/exceed Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst/exceed Defined has no effect on the direction of T Rowe i.e., T Rowe and Catalyst/exceed Defined go up and down completely randomly.

Pair Corralation between T Rowe and Catalyst/exceed Defined

Assuming the 90 days horizon T Rowe is expected to generate 3.06 times less return on investment than Catalyst/exceed Defined. But when comparing it to its historical volatility, T Rowe Price is 2.68 times less risky than Catalyst/exceed Defined. It trades about 0.29 of its potential returns per unit of risk. Catalystexceed Defined Shield is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  990.00  in Catalystexceed Defined Shield on June 19, 2025 and sell it today you would earn a total of  58.00  from holding Catalystexceed Defined Shield or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

T Rowe Price  vs.  Catalystexceed Defined Shield

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 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.

Catalyst/exceed Defined

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystexceed Defined Shield are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst/exceed Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with T Rowe and Catalyst/exceed Defined

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

The idea behind T Rowe Price and Catalystexceed Defined Shield 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.