Correlation Between Prudential Jennison and Prudential Qma

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

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

Diversification Opportunities for Prudential Jennison and Prudential Qma

0.89

Correlation Coefficient

Prudential Jennison  Prudential Qma

Very poor diversification

The 3 months correlation between Prudential and Prudential is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial 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 Prudential Jennison 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 Prudential Jennison Financial 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 Prudential Jennison i.e., Prudential Jennison and Prudential Qma go up and down completely randomly.

Pair Corralation between Prudential Jennison and Prudential Qma

Assuming the 90 days horizon Prudential Jennison is expected to generate 3.19 times less return on investment than Prudential Qma. In addition to that, Prudential Jennison is 1.25 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 0.22 per unit of volatility. If you would invest  1,281  in Prudential Qma Emerging on May 10, 2025 and sell it today you would earn a total of  127.00  from holding Prudential Qma Emerging or generate 9.91% return on investment over 90 days.

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

Prudential Jennison Financial  vs.  Prudential Qma Emerging

Prudential Jennison

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Jennison Financial are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, 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 17 (%) 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 September 2025.

Pair Trading with Prudential Jennison and Prudential Qma

The main advantage of trading using opposite Prudential Jennison and Prudential Qma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison 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 Prudential Jennison Financial 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.