Correlation Between AllianzGI Convertible and Mount Logan

Can any of the company-specific risk be diversified away by investing in both AllianzGI Convertible and Mount Logan 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 Convertible and Mount Logan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AllianzGI Convertible Income and Mount Logan Capital, you can compare the effects of market volatilities on AllianzGI Convertible and Mount Logan 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 Convertible with a short position of Mount Logan. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianzGI Convertible and Mount Logan.

Diversification Opportunities for AllianzGI Convertible and Mount Logan

0.34

Correlation Coefficient

AllianzGI Convertible  Mount Logan

Weak diversification

The 3 months correlation between AllianzGI and Mount is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding AllianzGI Convertible Income and Mount Logan Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Logan Capital and AllianzGI Convertible 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 Convertible Income are associated (or correlated) with Mount Logan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Logan Capital has no effect on the direction of AllianzGI Convertible i.e., AllianzGI Convertible and Mount Logan go up and down completely randomly.

Pair Corralation between AllianzGI Convertible and Mount Logan

Considering the 90-day investment horizon AllianzGI Convertible is expected to generate 26.74 times less return on investment than Mount Logan. But when comparing it to its historical volatility, AllianzGI Convertible Income is 12.38 times less risky than Mount Logan. It trades about 0.1 of its potential returns per unit of risk. Mount Logan Capital is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Mount Logan Capital on February 27, 2024 and sell it today you would earn a total of  17.00  from holding Mount Logan Capital or generate 12.14% return on investment over 90 days.

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

AllianzGI Convertible Income  vs.  Mount Logan Capital

AllianzGI Convertible

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AllianzGI Convertible Income are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, AllianzGI Convertible is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Mount Logan Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mount Logan Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Mount Logan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AllianzGI Convertible and Mount Logan

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

The idea behind AllianzGI Convertible Income and Mount Logan Capital 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 Transaction History module to view history of all your transactions and understand their impact on performance.