Correlation Between Casella Waste and LanzaTech Global
Can any of the company-specific risk be diversified away by investing in both Casella Waste 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 Casella Waste and LanzaTech Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casella Waste Systems and LanzaTech Global, you can compare the effects of market volatilities on Casella Waste 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 Casella Waste with a short position of LanzaTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casella Waste and LanzaTech Global.
Diversification Opportunities for Casella Waste and LanzaTech Global
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Casella and LanzaTech is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Casella Waste Systems and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Casella Waste 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 Casella Waste Systems 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 Casella Waste i.e., Casella Waste and LanzaTech Global go up and down completely randomly.
Pair Corralation between Casella Waste and LanzaTech Global
Given the investment horizon of 90 days Casella Waste is expected to generate 31.81 times less return on investment than LanzaTech Global. But when comparing it to its historical volatility, Casella Waste Systems is 33.84 times less risky than LanzaTech Global. It trades about 0.05 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 August 27, 2024 and sell it today you would lose (26.00) from holding LanzaTech Global or give up 70.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.88% |
| Values | Daily Returns |
Casella Waste Systems vs. LanzaTech Global
Performance |
| Timeline |
| Casella Waste Systems |
| LanzaTech Global |
Casella Waste and LanzaTech Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casella Waste and LanzaTech Global
The main advantage of trading using opposite Casella Waste and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casella Waste 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.| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
| LanzaTech Global vs. Valneva SE ADR | LanzaTech Global vs. Asure Software | LanzaTech Global vs. Estee Lauder Companies | LanzaTech Global vs. Timken Company |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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