Correlation Between LanzaTech Global and SPACE

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

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

Diversification Opportunities for LanzaTech Global and SPACE

-0.43

Correlation Coefficient

LanzaTech Global  SPACE

Very good diversification

The 3 months correlation between LanzaTech and SPACE is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and SPACE go up and down completely randomly.

Pair Corralation between LanzaTech Global and SPACE

Given the investment horizon of 90 days LanzaTech Global is expected to under-perform the SPACE. In addition to that, LanzaTech Global is 1.33 times more volatile than SPACE. It trades about -0.24 of its total potential returns per unit of risk. SPACE is currently generating about 0.24 per unit of volatility. If you would invest  43.00  in SPACE on August 30, 2024 and sell it today you would earn a total of  13.00  from holding SPACE or generate 30.23% return on investment over 90 days.

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

LanzaTech Global  vs.  SPACE

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 latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SPACE

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LanzaTech Global and SPACE

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

The idea behind LanzaTech Global and SPACE 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.