Correlation Between Permanent Portfolio and T Rowe

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

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

Diversification Opportunities for Permanent Portfolio and T Rowe

0.94

Correlation Coefficient

Permanent Portfolio  T Rowe

Almost no diversification

The 3 months correlation between PERMANENT and RBAIX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Permanent Portfolio Class 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 Permanent Portfolio 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 Permanent Portfolio Class 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 Permanent Portfolio i.e., Permanent Portfolio and T Rowe go up and down completely randomly.

Pair Corralation between Permanent Portfolio and T Rowe

Assuming the 90 days horizon Permanent Portfolio Class is expected to generate 1.52 times more return on investment than T Rowe. However, Permanent Portfolio is 1.52 times more volatile than T Rowe Price. It trades about 0.1 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.14 per unit of risk. If you would invest  7,294  in Permanent Portfolio Class on August 1, 2025 and sell it today you would earn a total of  120.00  from holding Permanent Portfolio Class or generate 1.65% return on investment over 90 days.

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

Permanent Portfolio Class  vs.  T Rowe Price

Permanent Portfolio Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Permanent Portfolio Class are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Permanent Portfolio may actually be approaching a critical reversion point that can send shares even higher in November 2025.

T Rowe Price

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Permanent Portfolio and T Rowe

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

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.