Correlation Between Fiverr International and LanzaTech Global

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

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

Diversification Opportunities for Fiverr International and LanzaTech Global

-0.63

Correlation Coefficient

Fiverr International  LanzaTech Global

Excellent diversification

The 3 months correlation between Fiverr and LanzaTech is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Fiverr International 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 Fiverr International 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 Fiverr International i.e., Fiverr International and LanzaTech Global go up and down completely randomly.

Pair Corralation between Fiverr International and LanzaTech Global

Given the investment horizon of 90 days Fiverr International is expected to generate 0.51 times more return on investment than LanzaTech Global. However, Fiverr International is 1.97 times less risky than LanzaTech Global. It trades about 0.16 of its potential returns per unit of risk. LanzaTech Global is currently generating about -0.01 per unit of risk. If you would invest  2,397  in Fiverr International on September 1, 2024 and sell it today you would earn a total of  864.00  from holding Fiverr International or generate 36.05% return on investment over 90 days.

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

Fiverr International  vs.  LanzaTech Global

Fiverr International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fiverr International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fiverr International reported solid returns over the last few months and may actually be approaching a breakup point.

LanzaTech Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LanzaTech Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LanzaTech Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fiverr International and LanzaTech Global

The main advantage of trading using opposite Fiverr International and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International 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 Fiverr International 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.