Correlation Between Allianzgi Diversified and Sentinel Multi-asset

Can any of the company-specific risk be diversified away by investing in both Allianzgi Diversified and Sentinel Multi-asset 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 Allianzgi Diversified and Sentinel Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Diversified Income and Sentinel Multi Asset Income, you can compare the effects of market volatilities on Allianzgi Diversified and Sentinel Multi-asset 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 Allianzgi Diversified with a short position of Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Diversified and Sentinel Multi-asset.

Diversification Opportunities for Allianzgi Diversified and Sentinel Multi-asset

-0.37

Correlation Coefficient

Allianzgi Diversified  Sentinel Multi-asset

Very good diversification

The 3 months correlation between Allianzgi and Sentinel is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset and Allianzgi Diversified 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 Allianzgi Diversified Income are associated (or correlated) with Sentinel Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Sentinel Multi-asset go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Sentinel Multi-asset

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to generate 0.7 times more return on investment than Sentinel Multi-asset. However, Allianzgi Diversified Income is 1.42 times less risky than Sentinel Multi-asset. It trades about 0.06 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.01 per unit of risk. If you would invest  1,954  in Allianzgi Diversified Income on October 20, 2024 and sell it today you would earn a total of  299.00  from holding Allianzgi Diversified Income or generate 15.3% return on investment over 90 days.

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

Allianzgi Diversified Income  vs.  Sentinel Multi Asset Income

Allianzgi Diversified

Risk-Adjusted Performance

10 of 100

OK

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

Sentinel Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentinel Multi Asset Income 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 forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Allianzgi Diversified and Sentinel Multi-asset

The main advantage of trading using opposite Allianzgi Diversified and Sentinel Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Diversified position performs unexpectedly, Sentinel Multi-asset 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 Sentinel Multi-asset will offset losses from the drop in Sentinel Multi-asset's long position.

The idea behind Allianzgi Diversified Income and Sentinel Multi Asset Income 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.