Correlation Between Prudential Qma and Catalyst/smh Total

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

By analyzing existing cross correlation between Prudential Qma Large Cap and Catalystsmh Total Return, you can compare the effects of market volatilities on Prudential Qma and Catalyst/smh Total 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 Catalyst/smh Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Qma and Catalyst/smh Total.

Diversification Opportunities for Prudential Qma and Catalyst/smh Total

0.95

Correlation Coefficient

Prudential Qma  Catalyst/smh Total

Almost no diversification

The 3 months correlation between Prudential and Catalyst/smh is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Large Cap and Catalystsmh Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh Total Return 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 Large Cap are associated (or correlated) with Catalyst/smh Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh Total Return has no effect on the direction of Prudential Qma i.e., Prudential Qma and Catalyst/smh Total go up and down completely randomly.

Pair Corralation between Prudential Qma and Catalyst/smh Total

Assuming the 90 days horizon Prudential Qma Large Cap is expected to under-perform the Catalyst/smh Total. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Qma Large Cap is 1.14 times less risky than Catalyst/smh Total. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Catalystsmh Total Return is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  496.00  in Catalystsmh Total Return on July 16, 2025 and sell it today you would earn a total of  3.00  from holding Catalystsmh Total Return or generate 0.6% return on investment over 90 days.

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

Prudential Qma Large Cap  vs.  Catalystsmh Total Return

Prudential Qma Large

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Large Cap are ranked lower than 12 (%) 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.

Catalystsmh Total Return

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystsmh Total Return are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Catalyst/smh Total may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Prudential Qma and Catalyst/smh Total

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

The idea behind Prudential Qma Large Cap and Catalystsmh Total Return 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.