Correlation Between Adams Natural and Prudential Qma

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

By analyzing existing cross correlation between Adams Natural Resources and Prudential Qma Emerging, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Prudential Qma.

Diversification Opportunities for Adams Natural and Prudential Qma

0.44

Correlation Coefficient

Adams Natural  Prudential Qma

Very weak diversification

The 3 months correlation between Adams and Prudential is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Prudential Qma Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Emerging and Adams Natural 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 Adams Natural Resources 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 Emerging has no effect on the direction of Adams Natural i.e., Adams Natural and Prudential Qma go up and down completely randomly.

Pair Corralation between Adams Natural and Prudential Qma

Considering the 90-day investment horizon Adams Natural is expected to generate 4.54 times less return on investment than Prudential Qma. In addition to that, Adams Natural is 1.35 times more volatile than Prudential Qma Emerging. It trades about 0.05 of its total potential returns per unit of risk. Prudential Qma Emerging is currently generating about 0.29 per unit of volatility. If you would invest  1,368  in Prudential Qma Emerging on July 4, 2025 and sell it today you would earn a total of  163.00  from holding Prudential Qma Emerging or generate 11.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Adams Natural Resources  vs.  Prudential Qma Emerging

Adams Natural Resources

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Adams Natural Resources are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Adams Natural is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Prudential Qma Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Emerging are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Prudential Qma may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Adams Natural and Prudential Qma

The main advantage of trading using opposite Adams Natural and Prudential Qma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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 Adams Natural Resources and Prudential Qma Emerging 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.