Correlation Between Prudential Qma and Old Westbury

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

By analyzing existing cross correlation between Prudential Qma Mid Cap and Old Westbury Municipal, you can compare the effects of market volatilities on Prudential Qma and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Qma and Old Westbury.

Diversification Opportunities for Prudential Qma and Old Westbury

0.86

Correlation Coefficient

Prudential Qma  Old Westbury

Very poor diversification

The 3 months correlation between PRUDENTIAL and OLD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Mid Cap and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Mid Cap are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Prudential Qma i.e., Prudential Qma and Old Westbury go up and down completely randomly.

Pair Corralation between Prudential Qma and Old Westbury

Assuming the 90 days horizon Prudential Qma Mid Cap is expected to generate 6.98 times more return on investment than Old Westbury. However, Prudential Qma is 6.98 times more volatile than Old Westbury Municipal. It trades about 0.11 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.31 per unit of risk. If you would invest  2,573  in Prudential Qma Mid Cap on July 5, 2025 and sell it today you would earn a total of  141.00  from holding Prudential Qma Mid Cap or generate 5.48% return on investment over 90 days.

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

Prudential Qma Mid Cap  vs.  Old Westbury Municipal

Prudential Qma Mid

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Qma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Old Westbury Municipal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Municipal are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Old Westbury 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 Old Westbury

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

The idea behind Prudential Qma Mid Cap and Old Westbury Municipal 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.