Correlation Between Evertz Technologies and LanzaTech Global

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

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

Diversification Opportunities for Evertz Technologies and LanzaTech Global

-0.38

Correlation Coefficient

Evertz Technologies  LanzaTech Global

Very good diversification

The 3 months correlation between Evertz and LanzaTech is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Evertz Technologies 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 Evertz Technologies Limited 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 Evertz Technologies i.e., Evertz Technologies and LanzaTech Global go up and down completely randomly.

Pair Corralation between Evertz Technologies and LanzaTech Global

Assuming the 90 days horizon Evertz Technologies is expected to generate 19.65 times less return on investment than LanzaTech Global. But when comparing it to its historical volatility, Evertz Technologies Limited is 11.2 times less risky than LanzaTech Global. It trades about 0.07 of its potential returns per unit of risk. LanzaTech Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  15.00  in LanzaTech Global on October 26, 2024 and sell it today you would earn a total of  8.20  from holding LanzaTech Global or generate 54.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

Evertz Technologies Limited  vs.  LanzaTech Global

Evertz Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evertz Technologies Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evertz Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

LanzaTech Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LanzaTech Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, LanzaTech Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evertz Technologies and LanzaTech Global

The main advantage of trading using opposite Evertz Technologies and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertz Technologies 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 Evertz Technologies Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.