Correlation Between LanzaTech Global and Gfl Environmental

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

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

Diversification Opportunities for LanzaTech Global and Gfl Environmental

-0.69

Correlation Coefficient

LanzaTech Global  Gfl Environmental

Excellent diversification

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

Pair Corralation between LanzaTech Global and Gfl Environmental

Assuming the 90 days horizon LanzaTech Global is expected to under-perform the Gfl Environmental. In addition to that, LanzaTech Global is 5.36 times more volatile than Gfl Environmental Holdings. It trades about -0.1 of its total potential returns per unit of risk. Gfl Environmental Holdings is currently generating about 0.14 per unit of volatility. If you would invest  4,019  in Gfl Environmental Holdings on September 15, 2024 and sell it today you would earn a total of  516.00  from holding Gfl Environmental Holdings or generate 12.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.81%
Values	Daily Returns

LanzaTech Global  vs.  Gfl Environmental Holdings

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. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Gfl Environmental

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gfl Environmental Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Gfl Environmental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with LanzaTech Global and Gfl Environmental

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

The idea behind LanzaTech Global and Gfl Environmental Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.