Correlation Between LanzaTech Global and CleanCore Solutions

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

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

Diversification Opportunities for LanzaTech Global and CleanCore Solutions

-0.29

Correlation Coefficient

LanzaTech Global  CleanCore Solutions

Very good diversification

The 3 months correlation between LanzaTech and CleanCore is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and CleanCore Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanCore Solutions 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 CleanCore Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanCore Solutions has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and CleanCore Solutions go up and down completely randomly.

Pair Corralation between LanzaTech Global and CleanCore Solutions

Assuming the 90 days horizon LanzaTech Global is expected to generate 2.08 times more return on investment than CleanCore Solutions. However, LanzaTech Global is 2.08 times more volatile than CleanCore Solutions. It trades about 0.04 of its potential returns per unit of risk. CleanCore Solutions is currently generating about 0.05 per unit of risk. If you would invest  18.00  in LanzaTech Global on December 5, 2024 and sell it today you would lose (2.00) from holding LanzaTech Global or give up 11.11% of portfolio value over 90 days.

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

LanzaTech Global  vs.  CleanCore Solutions

LanzaTech Global

Risk-Adjusted Performance

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.

CleanCore Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days CleanCore Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with LanzaTech Global and CleanCore Solutions

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

The idea behind LanzaTech Global and CleanCore Solutions 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.