Correlation Between Advanced Micro and T Rowe

Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Micro Devices and T Rowe Price, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and T Rowe.

Diversification Opportunities for Advanced Micro and T Rowe

0.52

Correlation Coefficient

Advanced Micro  T Rowe

Very weak diversification

The 3 months correlation between Advanced and TRZRX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices 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 Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and T Rowe go up and down completely randomly.

Pair Corralation between Advanced Micro and T Rowe

Assuming the 90 days trading horizon Advanced Micro Devices is expected to generate 5.54 times more return on investment than T Rowe. However, Advanced Micro is 5.54 times more volatile than T Rowe Price. It trades about 0.11 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.11 per unit of risk. If you would invest  3,096  in Advanced Micro Devices on August 26, 2025 and sell it today you would earn a total of  879.00  from holding Advanced Micro Devices or generate 28.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Advanced Micro Devices  vs.  T Rowe Price

Advanced Micro Devices

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Advanced Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

T Rowe Price

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 8 (%) 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.

Pair Trading with Advanced Micro and T Rowe

The main advantage of trading using opposite Advanced Micro and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.

The idea behind Advanced Micro Devices 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.