Correlation Between Cass Information and LanzaTech Global

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

By analyzing existing cross correlation between Cass Information Systems and LanzaTech Global, you can compare the effects of market volatilities on Cass Information and LanzaTech 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 Cass Information with a short position of LanzaTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and LanzaTech Global.

Diversification Opportunities for Cass Information and LanzaTech Global

-0.69

Correlation Coefficient

Cass Information  LanzaTech Global

Excellent diversification

The 3 months correlation between Cass and LanzaTech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Cass Information 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 Cass Information Systems are associated (or correlated) with LanzaTech Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LanzaTech Global has no effect on the direction of Cass Information i.e., Cass Information and LanzaTech Global go up and down completely randomly.

Pair Corralation between Cass Information and LanzaTech Global

Given the investment horizon of 90 days Cass Information Systems is expected to generate 0.16 times more return on investment than LanzaTech Global. However, Cass Information Systems is 6.43 times less risky than LanzaTech Global. It trades about -0.02 of its potential returns per unit of risk. LanzaTech Global is currently generating about -0.03 per unit of risk. If you would invest  4,486  in Cass Information Systems on December 1, 2024 and sell it today you would lose (115.00) from holding Cass Information Systems or give up 2.56% of portfolio value over 90 days.

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

Cass Information Systems  vs.  LanzaTech Global

Cass Information Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cass Information Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cass Information is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

LanzaTech Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days LanzaTech Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat 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 company investors.

Pair Trading with Cass Information and LanzaTech Global

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

The idea behind Cass Information Systems and LanzaTech Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.