Correlation Between Meiwu Technology and LanzaTech Global

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

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

Diversification Opportunities for Meiwu Technology and LanzaTech Global

0.44

Correlation Coefficient

Meiwu Technology  LanzaTech Global

Very weak diversification

The 3 months correlation between Meiwu and LanzaTech is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and LanzaTech Global go up and down completely randomly.

Pair Corralation between Meiwu Technology and LanzaTech Global

Considering the 90-day investment horizon Meiwu Technology is expected to generate 15.27 times less return on investment than LanzaTech Global. But when comparing it to its historical volatility, Meiwu Technology Co is 5.74 times less risky than LanzaTech Global. It trades about 0.02 of its potential returns per unit of risk. LanzaTech Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  37.00  in LanzaTech Global on October 7, 2024 and sell it today you would lose (4.00) from holding LanzaTech Global or give up 10.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.12%
Values	Daily Returns

Meiwu Technology Co  vs.  LanzaTech Global

Meiwu Technology

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

LanzaTech Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LanzaTech Global are ranked lower than 12 (%) 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.

Pair Trading with Meiwu Technology and LanzaTech Global

The main advantage of trading using opposite Meiwu Technology and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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 Meiwu Technology Co 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.