Correlation Between T Rowe and Timothy Large/mid-cap

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

Diversification Opportunities for T Rowe and Timothy Large/mid-cap

-0.5

Correlation Coefficient

T Rowe  Timothy Large/mid-cap

Very good diversification

The 3 months correlation between TRECX and Timothy is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Timothy Largemid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Large/mid-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 Timothy Large/mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Large/mid-cap has no effect on the direction of T Rowe i.e., T Rowe and Timothy Large/mid-cap go up and down completely randomly.

Pair Corralation between T Rowe and Timothy Large/mid-cap

Assuming the 90 days horizon T Rowe Price is expected to generate 0.23 times more return on investment than Timothy Large/mid-cap. However, T Rowe Price is 4.44 times less risky than Timothy Large/mid-cap. It trades about 0.17 of its potential returns per unit of risk. Timothy Largemid Cap Value is currently generating about -0.09 per unit of risk. If you would invest  922.00  in T Rowe Price on August 25, 2025 and sell it today you would earn a total of  16.00  from holding T Rowe Price or generate 1.74% return on investment over 90 days.

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

T Rowe Price  vs.  Timothy Largemid Cap Value

T Rowe Price

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, T Rowe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Timothy Large/mid-cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Timothy Largemid Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Timothy Large/mid-cap 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 Timothy Large/mid-cap

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

The idea behind T Rowe Price and Timothy Largemid Cap Value 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.