Correlation Between Prudential Qma and Cm Commodity

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

Diversification Opportunities for Prudential Qma and Cm Commodity

0.22

Correlation Coefficient

Prudential Qma  Cm Commodity

Modest diversification

The 3 months correlation between Prudential and COMIX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Small Cap and Cm Modity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cm Modity Index 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 Cm Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cm Modity Index has no effect on the direction of Prudential Qma i.e., Prudential Qma and Cm Commodity go up and down completely randomly.

Pair Corralation between Prudential Qma and Cm Commodity

Assuming the 90 days horizon Prudential Qma Small Cap is expected to generate 1.93 times more return on investment than Cm Commodity. However, Prudential Qma is 1.93 times more volatile than Cm Modity Index. It trades about 0.19 of its potential returns per unit of risk. Cm Modity Index is currently generating about 0.08 per unit of risk. If you would invest  1,586  in Prudential Qma Small Cap on May 26, 2025 and sell it today you would earn a total of  241.00  from holding Prudential Qma Small Cap or generate 15.2% return on investment over 90 days.

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

Prudential Qma Small Cap  vs.  Cm Modity Index

Prudential Qma Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Small Cap are ranked lower than 15 (%) 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.

Cm Modity Index

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cm Modity Index are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cm Commodity 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 Cm Commodity

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

The idea behind Prudential Qma Small Cap and Cm Modity Index 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.