Correlation Between Franklin Covey and LanzaTech Global

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

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

Diversification Opportunities for Franklin Covey and LanzaTech Global

0.74

Correlation Coefficient

Franklin Covey  LanzaTech Global

Poor diversification

The 3 months correlation between Franklin and LanzaTech is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and LanzaTech Global go up and down completely randomly.

Pair Corralation between Franklin Covey and LanzaTech Global

Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the LanzaTech Global. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 2.53 times less risky than LanzaTech Global. The stock trades about -0.04 of its potential returns per unit of risk. The LanzaTech Global is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  150.00  in LanzaTech Global on September 1, 2024 and sell it today you would lose (26.00) from holding LanzaTech Global or give up 17.33% of portfolio value over 90 days.

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

Franklin Covey  vs.  LanzaTech Global

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 somewhat strong basic indicators, LanzaTech Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Covey and LanzaTech Global

The main advantage of trading using opposite Franklin Covey and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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 Franklin Covey 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.