Correlation Between LanzaTech Global and Avalon Holdings
Can any of the company-specific risk be diversified away by investing in both LanzaTech Global and Avalon Holdings 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 Avalon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LanzaTech Global and Avalon Holdings, you can compare the effects of market volatilities on LanzaTech Global and Avalon Holdings 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 Avalon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LanzaTech Global and Avalon Holdings.
Diversification Opportunities for LanzaTech Global and Avalon Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LanzaTech and Avalon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and Avalon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalon Holdings 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 Avalon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalon Holdings has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and Avalon Holdings go up and down completely randomly.
Pair Corralation between LanzaTech Global and Avalon Holdings
Assuming the 90 days horizon LanzaTech Global is expected to under-perform the Avalon Holdings. In addition to that, LanzaTech Global is 1.64 times more volatile than Avalon Holdings. It trades about -0.1 of its total potential returns per unit of risk. Avalon Holdings is currently generating about 0.16 per unit of volatility. If you would invest 267.00 in Avalon Holdings on August 28, 2024 and sell it today you would earn a total of 48.00 from holding Avalon Holdings or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
LanzaTech Global vs. Avalon Holdings
Performance |
| Timeline |
| LanzaTech Global |
| Avalon Holdings |
LanzaTech Global and Avalon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LanzaTech Global and Avalon Holdings
The main advantage of trading using opposite LanzaTech Global and Avalon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LanzaTech Global position performs unexpectedly, Avalon Holdings 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 Avalon Holdings will offset losses from the drop in Avalon Holdings' long position.| LanzaTech Global vs. Valneva SE ADR | LanzaTech Global vs. Asure Software | LanzaTech Global vs. Estee Lauder Companies | LanzaTech Global vs. Timken Company |
| Avalon Holdings vs. Agilyx AS | Avalon Holdings vs. BQE Water | Avalon Holdings vs. EcoPlus | Avalon Holdings vs. Anaergia |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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