Correlation Between Prudential Qma and Short Oil

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

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

Diversification Opportunities for Prudential Qma and Short Oil

-0.6

Correlation Coefficient

Prudential Qma  Short Oil

Excellent diversification

The 3 months correlation between Prudential and Short is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Emerging and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas and Prudential Qma 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 Qma Emerging are associated (or correlated) with Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Prudential Qma i.e., Prudential Qma and Short Oil go up and down completely randomly.

Pair Corralation between Prudential Qma and Short Oil

Assuming the 90 days horizon Prudential Qma Emerging is expected to generate 0.67 times more return on investment than Short Oil. However, Prudential Qma Emerging is 1.49 times less risky than Short Oil. It trades about 0.21 of its potential returns per unit of risk. Short Oil Gas is currently generating about 0.0 per unit of risk. If you would invest  1,293  in Prudential Qma Emerging on May 16, 2025 and sell it today you would earn a total of  126.00  from holding Prudential Qma Emerging or generate 9.74% return on investment over 90 days.

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

Prudential Qma Emerging  vs.  Short Oil Gas

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 16 (%) 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.

Short Oil Gas

Risk-Adjusted Performance

Weakest

Over the last 90 days Short Oil Gas has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Short Oil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Prudential Qma and Short Oil

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

The idea behind Prudential Qma Emerging and Short Oil Gas 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.