Correlation Between Columbia Pacific/asia and Prudential Qma

Can any of the company-specific risk be diversified away by investing in both Columbia Pacific/asia and Prudential Qma 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 Columbia Pacific/asia and Prudential Qma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Pacificasia Fund and Prudential Qma Small Cap, you can compare the effects of market volatilities on Columbia Pacific/asia and Prudential Qma 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 Columbia Pacific/asia with a short position of Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Pacific/asia and Prudential Qma.

Diversification Opportunities for Columbia Pacific/asia and Prudential Qma

0.8

Correlation Coefficient

Columbia Pacific/asia  Prudential Qma

Very poor diversification

The 3 months correlation between Columbia and Prudential is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Pacificasia Fund and Prudential Qma Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Small and Columbia Pacific/asia 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 Columbia Pacificasia Fund are associated (or correlated) with Prudential Qma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Qma Small has no effect on the direction of Columbia Pacific/asia i.e., Columbia Pacific/asia and Prudential Qma go up and down completely randomly.

Pair Corralation between Columbia Pacific/asia and Prudential Qma

Assuming the 90 days horizon Columbia Pacificasia Fund is expected to generate 0.59 times more return on investment than Prudential Qma. However, Columbia Pacificasia Fund is 1.68 times less risky than Prudential Qma. It trades about 0.24 of its potential returns per unit of risk. Prudential Qma Small Cap is currently generating about 0.12 per unit of risk. If you would invest  904.00  in Columbia Pacificasia Fund on July 8, 2025 and sell it today you would earn a total of  95.00  from holding Columbia Pacificasia Fund or generate 10.51% return on investment over 90 days.

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

Columbia Pacificasia Fund  vs.  Prudential Qma Small Cap

Columbia Pacific/asia

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Pacificasia Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Pacific/asia may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Prudential Qma Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Small Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Qma may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Columbia Pacific/asia and Prudential Qma

The main advantage of trading using opposite Columbia Pacific/asia and Prudential Qma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Pacific/asia position performs unexpectedly, Prudential Qma 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 Prudential Qma will offset losses from the drop in Prudential Qma's long position.

The idea behind Columbia Pacificasia Fund and Prudential Qma Small Cap 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.