Correlation Between Prudential Qma and Mainstay Servative

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

Diversification Opportunities for Prudential Qma and Mainstay Servative

0.93

Correlation Coefficient

Prudential Qma  Mainstay Servative

Almost no diversification

The 3 months correlation between Prudential and Mainstay is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Small Cap and Mainstay Servative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Servative 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 Mainstay Servative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Servative has no effect on the direction of Prudential Qma i.e., Prudential Qma and Mainstay Servative go up and down completely randomly.

Pair Corralation between Prudential Qma and Mainstay Servative

Assuming the 90 days horizon Prudential Qma Small Cap is expected to generate 3.43 times more return on investment than Mainstay Servative. However, Prudential Qma is 3.43 times more volatile than Mainstay Servative Allocation. It trades about 0.14 of its potential returns per unit of risk. Mainstay Servative Allocation is currently generating about 0.19 per unit of risk. If you would invest  1,509  in Prudential Qma Small Cap on May 3, 2025 and sell it today you would earn a total of  140.00  from holding Prudential Qma Small Cap or generate 9.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Prudential Qma Small Cap  vs.  Mainstay Servative Allocation

Prudential Qma Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Small Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Prudential Qma may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Mainstay Servative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Servative Allocation are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mainstay Servative 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 Mainstay Servative

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

The idea behind Prudential Qma Small Cap and Mainstay Servative Allocation 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.