Correlation Between Prudential Qma and Columbia Pacific/asia

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

By analyzing existing cross correlation between Prudential Qma Small Cap and Columbia Pacificasia Fund, you can compare the effects of market volatilities on Prudential Qma and Columbia Pacific/asia 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 Columbia Pacific/asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Qma and Columbia Pacific/asia.

Diversification Opportunities for Prudential Qma and Columbia Pacific/asia

0.74

Correlation Coefficient

Prudential Qma  Columbia Pacific/asia

Poor diversification

The 3 months correlation between Prudential and Columbia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Small Cap and Columbia Pacificasia Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Pacific/asia 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 Small Cap are associated (or correlated) with Columbia Pacific/asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Pacific/asia has no effect on the direction of Prudential Qma i.e., Prudential Qma and Columbia Pacific/asia go up and down completely randomly.

Pair Corralation between Prudential Qma and Columbia Pacific/asia

Assuming the 90 days horizon Prudential Qma is expected to generate 1.32 times less return on investment than Columbia Pacific/asia. In addition to that, Prudential Qma is 1.52 times more volatile than Columbia Pacificasia Fund. It trades about 0.1 of its total potential returns per unit of risk. Columbia Pacificasia Fund is currently generating about 0.19 per unit of volatility. If you would invest  918.00  in Columbia Pacificasia Fund on July 19, 2025 and sell it today you would earn a total of  92.00  from holding Columbia Pacificasia Fund or generate 10.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Prudential Qma Small Cap  vs.  Columbia Pacificasia Fund

Prudential Qma Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Small Cap are ranked lower than 7 (%) 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.

Columbia Pacific/asia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Pacificasia Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Pacific/asia may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Prudential Qma and Columbia Pacific/asia

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

The idea behind Prudential Qma Small Cap and Columbia Pacificasia Fund 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.