Correlation Between Onemain Holdings and T Rowe

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Can any of the company-specific risk be diversified away by investing in both Onemain Holdings and T Rowe 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 Onemain Holdings and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onemain Holdings and T Rowe Price, you can compare the effects of market volatilities on Onemain Holdings and T Rowe 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 Onemain Holdings with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onemain Holdings and T Rowe.

Diversification Opportunities for Onemain Holdings and T Rowe

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Onemain and T Rowe is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Onemain Holdings and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Onemain Holdings 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 Onemain Holdings are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Onemain Holdings i.e., Onemain Holdings and T Rowe go up and down completely randomly.

Pair Corralation between Onemain Holdings and T Rowe

Considering the 90-day investment horizon Onemain Holdings is expected to under-perform the T Rowe. In addition to that, Onemain Holdings is 1.36 times more volatile than T Rowe Price. It trades about -0.09 of its total potential returns per unit of risk. T Rowe Price is currently generating about -0.07 per unit of volatility. If you would invest  11,866  in T Rowe Price on July 7, 2022 and sell it today you would lose (540.00)  from holding T Rowe Price or give up 4.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Onemain Holdings  vs.  T Rowe Price

 Performance (%) 
       Timeline  
Onemain Holdings 
Onemain Performance
0 of 100
Over the last 90 days Onemain Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Onemain Price Channel

T Rowe Price 
T Rowe Performance
0 of 100
Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, T Rowe is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

T Rowe Price Channel

Onemain Holdings and T Rowe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Onemain Holdings and T Rowe

The main advantage of trading using opposite Onemain Holdings and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onemain Holdings position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.
Onemain Holdings vs. Paypal Holdings
The idea behind Onemain Holdings and T Rowe Price 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.
T Rowe vs. Boeing Company
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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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