Correlation Between LanzaTech Global and Alvotech

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

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

Diversification Opportunities for LanzaTech Global and Alvotech

0.36

Correlation Coefficient

LanzaTech Global  Alvotech

Weak diversification

The 3 months correlation between LanzaTech and Alvotech is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding LanzaTech Global and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech 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 Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of LanzaTech Global i.e., LanzaTech Global and Alvotech go up and down completely randomly.

Pair Corralation between LanzaTech Global and Alvotech

Given the investment horizon of 90 days LanzaTech Global is expected to under-perform the Alvotech. In addition to that, LanzaTech Global is 5.59 times more volatile than Alvotech. It trades about 0.0 of its total potential returns per unit of risk. Alvotech is currently generating about 0.78 per unit of volatility. If you would invest  1,169  in Alvotech on February 3, 2024 and sell it today you would earn a total of  282.00  from holding Alvotech or generate 24.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

LanzaTech Global  vs.  Alvotech

LanzaTech Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LanzaTech Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Alvotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alvotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alvotech is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with LanzaTech Global and Alvotech

The main advantage of trading using opposite LanzaTech Global and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LanzaTech Global position performs unexpectedly, Alvotech 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 Alvotech will offset losses from the drop in Alvotech's long position.

The idea behind LanzaTech Global and Alvotech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.