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 Mid 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
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prudential and Ashmore is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Mid 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 Mid 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 is expected to generate 1.54 times less return on investment than Ashmore Emerging. In addition to that, Prudential Qma is 1.15 times more volatile than Ashmore Emerging Markets. It trades about 0.25 of its total potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.44 per unit of volatility. If you would invest 1,309 in Ashmore Emerging Markets on April 22, 2025 and sell it today you would earn a total of 296.00 from holding Ashmore Emerging Markets or generate 22.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Prudential Qma Mid Cap vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Prudential Qma Mid |
| Ashmore Emerging Markets |
Prudential Qma and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
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.| Prudential Qma vs. Prudential Qma Mid Cap | Prudential Qma vs. Prudential Qma Mid Cap | Prudential Qma vs. Prudential Total Return | Prudential Qma vs. Harbor Mid Cap |
| Ashmore Emerging vs. Hartford International Equity | Ashmore Emerging vs. Balanced Fund Retail | Ashmore Emerging vs. Touchstone International Equity | Ashmore Emerging vs. Gmo Global Equity |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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