Correlation Between T Rowe and Live Oak
Can any of the company-specific risk be diversified away by investing in both T Rowe and Live Oak 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 Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on T Rowe and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Live Oak.
Diversification Opportunities for T Rowe and Live Oak
Very poor diversification
The 3 months correlation between TRARX and Live is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of T Rowe i.e., T Rowe and Live Oak go up and down completely randomly.
Pair Corralation between T Rowe and Live Oak
Assuming the 90 days horizon T Rowe is expected to generate 2.32 times less return on investment than Live Oak. But when comparing it to its historical volatility, T Rowe Price is 3.88 times less risky than Live Oak. It trades about 0.24 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,077 in Live Oak Health on July 27, 2025 and sell it today you would earn a total of 170.00 from holding Live Oak Health or generate 8.18% 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. Live Oak Health
Performance |
| Timeline |
| T Rowe Price |
| Live Oak Health |
T Rowe and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Live Oak
The main advantage of trading using opposite T Rowe and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| T Rowe vs. T Rowe Price | T Rowe vs. Paradigm Value Fund | T Rowe vs. Live Oak Health | T Rowe vs. Wesmark Tactical Opportunity |
| Live Oak vs. Wesmark Tactical Opportunity | Live Oak vs. T Rowe Price | Live Oak vs. Paradigm Value Fund | Live Oak vs. Nuveen Large Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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