Correlation Between LanzaTech Global and LiCycle Holdings
Can any of the company-specific risk be diversified away by investing in both LanzaTech Global and LiCycle 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 LiCycle 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 LiCycle Holdings Corp, you can compare the effects of market volatilities on LanzaTech Global and LiCycle 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 LiCycle Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LanzaTech Global and LiCycle Holdings.
Diversification Opportunities for LanzaTech Global and LiCycle Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LanzaTech and LiCycle is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and LiCycle Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiCycle Holdings Corp 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 LiCycle Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiCycle Holdings Corp has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and LiCycle Holdings go up and down completely randomly.
Pair Corralation between LanzaTech Global and LiCycle Holdings
Assuming the 90 days horizon LanzaTech Global is expected to generate 10.72 times more return on investment than LiCycle Holdings. However, LanzaTech Global is 10.72 times more volatile than LiCycle Holdings Corp. It trades about 0.09 of its potential returns per unit of risk. LiCycle Holdings Corp is currently generating about -0.05 per unit of risk. If you would invest 16.00 in LanzaTech Global on November 3, 2024 and sell it today you would earn a total of 6.50 from holding LanzaTech Global or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.9% |
| Values | Daily Returns |
LanzaTech Global vs. LiCycle Holdings Corp
Performance |
| Timeline |
| LanzaTech Global |
| LiCycle Holdings Corp |
LanzaTech Global and LiCycle Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LanzaTech Global and LiCycle Holdings
The main advantage of trading using opposite LanzaTech Global and LiCycle Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LanzaTech Global position performs unexpectedly, LiCycle 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 LiCycle Holdings will offset losses from the drop in LiCycle Holdings' long position.| LanzaTech Global vs. Cirmaker Technology | LanzaTech Global vs. Pinterest | LanzaTech Global vs. Bm Technologies | LanzaTech Global vs. Amkor Technology |
| LiCycle Holdings vs. Casella Waste Systems | LiCycle Holdings vs. Perma Fix Environmental Svcs | LiCycle Holdings vs. Montrose Environmental Grp | LiCycle Holdings vs. LanzaTech Global |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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