Correlation Between Simt Large and Prudential Qma

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

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

Diversification Opportunities for Simt Large and Prudential Qma

0.97

Correlation Coefficient

Simt Large  Prudential Qma

Almost no diversification

The 3 months correlation between Simt and Prudential is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap and Prudential Qma Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Large and Simt Large 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 Simt Large Cap 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 Large has no effect on the direction of Simt Large i.e., Simt Large and Prudential Qma go up and down completely randomly.

Pair Corralation between Simt Large and Prudential Qma

Assuming the 90 days horizon Simt Large Cap is expected to generate 1.2 times more return on investment than Prudential Qma. However, Simt Large is 1.2 times more volatile than Prudential Qma Large Cap. It trades about 0.21 of its potential returns per unit of risk. Prudential Qma Large Cap is currently generating about 0.23 per unit of risk. If you would invest  4,682  in Simt Large Cap on July 6, 2025 and sell it today you would earn a total of  426.00  from holding Simt Large Cap or generate 9.1% return on investment over 90 days.

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

Simt Large Cap  vs.  Prudential Qma Large Cap

Simt Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Large Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Simt Large may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Prudential Qma Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Large Cap are ranked lower than 18 (%) 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 Simt Large and Prudential Qma

The main advantage of trading using opposite Simt Large and Prudential Qma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Large 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 Simt Large Cap and Prudential Qma Large 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 Transaction History module to view history of all your transactions and understand their impact on performance.