Correlation Between LanzaTech Global and Cass Information

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

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

Diversification Opportunities for LanzaTech Global and Cass Information

-0.65

Correlation Coefficient

LanzaTech Global  Cass Information

Excellent diversification

The 3 months correlation between LanzaTech and Cass is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems and LanzaTech Global 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 LanzaTech Global are associated (or correlated) with Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and Cass Information go up and down completely randomly.

Pair Corralation between LanzaTech Global and Cass Information

Given the investment horizon of 90 days LanzaTech Global is expected to under-perform the Cass Information. In addition to that, LanzaTech Global is 6.4 times more volatile than Cass Information Systems. It trades about -0.02 of its total potential returns per unit of risk. Cass Information Systems is currently generating about -0.01 per unit of volatility. If you would invest  4,456  in Cass Information Systems on November 28, 2024 and sell it today you would lose (90.00) from holding Cass Information Systems or give up 2.02% of portfolio value over 90 days.

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

LanzaTech Global  vs.  Cass Information Systems

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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with LanzaTech Global and Cass Information

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

The idea behind LanzaTech Global and Cass Information Systems 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.