Correlation Between Prudential Qma and Siit Global

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

By analyzing existing cross correlation between Prudential Qma Strategic and Siit Global Managed, you can compare the effects of market volatilities on Prudential Qma and Siit Global 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 Siit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Qma and Siit Global.

Diversification Opportunities for Prudential Qma and Siit Global

0.71

Correlation Coefficient

Prudential Qma  Siit Global

Poor diversification

The 3 months correlation between Prudential and Siit is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Qma Strategic and Siit Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Global Managed 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 Strategic are associated (or correlated) with Siit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Global Managed has no effect on the direction of Prudential Qma i.e., Prudential Qma and Siit Global go up and down completely randomly.

Pair Corralation between Prudential Qma and Siit Global

Assuming the 90 days horizon Prudential Qma Strategic is expected to under-perform the Siit Global. In addition to that, Prudential Qma is 1.53 times more volatile than Siit Global Managed. It trades about -0.11 of its total potential returns per unit of risk. Siit Global Managed is currently generating about 0.35 per unit of volatility. If you would invest  1,139  in Siit Global Managed on December 4, 2024 and sell it today you would earn a total of  35.00  from holding Siit Global Managed or generate 3.07% return on investment over 90 days.

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

Prudential Qma Strategic  vs.  Siit Global Managed

Prudential Qma Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prudential Qma Strategic has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Siit Global Managed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siit Global Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Siit Global 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 Siit Global

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

The idea behind Prudential Qma Strategic and Siit Global Managed 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.