Correlation Between Prudential Qma and Ashmore Emerging

Can any of the company-specific risk be diversified away by investing in both Prudential Qma and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Prudential Qma and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Qma and Ashmore Emerging.

Diversification Opportunities for Prudential Qma and Ashmore Emerging

0.86

Correlation Coefficient

Prudential Qma  Ashmore Emerging

Very poor diversification

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

Pair Corralation between Prudential Qma and Ashmore Emerging

Assuming the 90 days horizon Prudential Qma Small Cap is expected to generate 1.52 times more return on investment than Ashmore Emerging. However, Prudential Qma is 1.52 times more volatile than Ashmore Emerging Markets. It trades about 0.18 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.17 per unit of risk. If you would invest  1,557  in Prudential Qma Small Cap on May 21, 2025 and sell it today you would earn a total of  200.00  from holding Prudential Qma Small Cap or generate 12.85% return on investment over 90 days.

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

Prudential Qma Small Cap  vs.  Ashmore Emerging Markets

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 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Qma showed solid returns over the last few months and may actually be approaching a breakup point.

Ashmore Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Emerging Markets are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ashmore Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Prudential Qma and Ashmore Emerging

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

The idea behind Prudential Qma Small Cap and Ashmore Emerging Markets 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.