Correlation Between Allianzgi Short and Catalyst/millburn

Can any of the company-specific risk be diversified away by investing in both Allianzgi Short and Catalyst/millburn 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 Short and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Short Duration and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Allianzgi Short and Catalyst/millburn 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 Short with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Short and Catalyst/millburn.

Diversification Opportunities for Allianzgi Short and Catalyst/millburn

-0.17

Correlation Coefficient

Allianzgi Short  Catalyst/millburn

Good diversification

The 3 months correlation between Allianzgi and Catalyst/millburn is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Short Duration and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Allianzgi Short 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 Short Duration are associated (or correlated) with Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Allianzgi Short i.e., Allianzgi Short and Catalyst/millburn go up and down completely randomly.

Pair Corralation between Allianzgi Short and Catalyst/millburn

Assuming the 90 days horizon Allianzgi Short Duration is expected to generate 0.18 times more return on investment than Catalyst/millburn. However, Allianzgi Short Duration is 5.59 times less risky than Catalyst/millburn. It trades about 0.17 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about -0.04 per unit of risk. If you would invest  1,360  in Allianzgi Short Duration on December 27, 2024 and sell it today you would earn a total of  17.00  from holding Allianzgi Short Duration or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Allianzgi Short Duration  vs.  Catalystmillburn Hedge Strateg

Allianzgi Short Duration

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Short Duration are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Allianzgi Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystmillburn Hedge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Catalystmillburn Hedge Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allianzgi Short and Catalyst/millburn

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

The idea behind Allianzgi Short Duration and Catalystmillburn Hedge Strategy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.