Correlation Between Suburban Propane and LanzaTech Global

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

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

Diversification Opportunities for Suburban Propane and LanzaTech Global

-0.1

Correlation Coefficient

Suburban Propane  LanzaTech Global

Good diversification

The 3 months correlation between Suburban and LanzaTech is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Suburban Propane 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 Suburban Propane Partners 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 Suburban Propane i.e., Suburban Propane and LanzaTech Global go up and down completely randomly.

Pair Corralation between Suburban Propane and LanzaTech Global

Considering the 90-day investment horizon Suburban Propane is expected to generate 13.06 times less return on investment than LanzaTech Global. But when comparing it to its historical volatility, Suburban Propane Partners is 7.27 times less risky than LanzaTech Global. It trades about 0.07 of its potential returns per unit of risk. LanzaTech Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  16.00  in LanzaTech Global on October 25, 2024 and sell it today you would earn a total of  11.49  from holding LanzaTech Global or generate 71.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Suburban Propane Partners  vs.  LanzaTech Global

Suburban Propane Partners

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Suburban Propane Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Suburban Propane may actually be approaching a critical reversion point that can send shares even higher in February 2025.

LanzaTech Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LanzaTech Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, LanzaTech Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suburban Propane and LanzaTech Global

The main advantage of trading using opposite Suburban Propane and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane 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 Suburban Propane Partners 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 Stocks Directory module to find actively traded stocks across global markets.