Correlation Between T Rowe and Jensen Portfolio
Can any of the company-specific risk be diversified away by investing in both T Rowe and Jensen Portfolio 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 Jensen Portfolio 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 The Jensen Portfolio, you can compare the effects of market volatilities on T Rowe and Jensen Portfolio 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 Jensen Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Jensen Portfolio.
Diversification Opportunities for T Rowe and Jensen Portfolio
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PDGIX and Jensen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio 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 Jensen Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of T Rowe i.e., T Rowe and Jensen Portfolio go up and down completely randomly.
Pair Corralation between T Rowe and Jensen Portfolio
Assuming the 90 days horizon T Rowe Price is expected to generate 0.89 times more return on investment than Jensen Portfolio. However, T Rowe Price is 1.12 times less risky than Jensen Portfolio. It trades about 0.14 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about 0.07 per unit of risk. If you would invest 8,025 in T Rowe Price on May 31, 2025 and sell it today you would earn a total of 377.00 from holding T Rowe Price or generate 4.7% 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. The Jensen Portfolio
Performance |
| Timeline |
| T Rowe Price |
| Jensen Portfolio |
T Rowe and Jensen Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Jensen Portfolio
The main advantage of trading using opposite T Rowe and Jensen Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Jensen Portfolio 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 Jensen Portfolio will offset losses from the drop in Jensen Portfolio's long position.The idea behind T Rowe Price and The Jensen Portfolio 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.| Jensen Portfolio vs. The Jensen Portfolio | Jensen Portfolio vs. T Rowe Price | Jensen Portfolio vs. Champlain Mid Cap | Jensen Portfolio vs. Massachusetts Investors Growth |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |