Correlation Between Kimball Electronics and LanzaTech Global

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

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

Diversification Opportunities for Kimball Electronics and LanzaTech Global

-0.35

Correlation Coefficient

Kimball Electronics  LanzaTech Global

Very good diversification

The 3 months correlation between Kimball and LanzaTech is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Kimball Electronics 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 Kimball Electronics 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 Kimball Electronics i.e., Kimball Electronics and LanzaTech Global go up and down completely randomly.

Pair Corralation between Kimball Electronics and LanzaTech Global

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.33 times more return on investment than LanzaTech Global. However, Kimball Electronics is 3.08 times less risky than LanzaTech Global. It trades about 0.08 of its potential returns per unit of risk. LanzaTech Global is currently generating about -0.01 per unit of risk. If you would invest  1,778  in Kimball Electronics on September 1, 2024 and sell it today you would earn a total of  183.00  from holding Kimball Electronics or generate 10.29% return on investment over 90 days.

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

Kimball Electronics  vs.  LanzaTech Global

Kimball Electronics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 Kimball Electronics and LanzaTech Global

The main advantage of trading using opposite Kimball Electronics and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics 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 Kimball Electronics 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.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .