Correlation Between Cielo Waste and LanzaTech Global

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

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

Diversification Opportunities for Cielo Waste and LanzaTech Global

0.28

Correlation Coefficient

Cielo Waste  LanzaTech Global

Modest diversification

The 3 months correlation between Cielo and LanzaTech is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cielo Waste Solutions and LanzaTech Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LanzaTech Global and Cielo Waste 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 Cielo Waste Solutions 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 Cielo Waste i.e., Cielo Waste and LanzaTech Global go up and down completely randomly.

Pair Corralation between Cielo Waste and LanzaTech Global

Assuming the 90 days horizon Cielo Waste is expected to generate 18.49 times less return on investment than LanzaTech Global. But when comparing it to its historical volatility, Cielo Waste Solutions is 1.56 times less risky than LanzaTech Global. It trades about 0.01 of its potential returns per unit of risk. LanzaTech Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  21.00  in LanzaTech Global on May 6, 2025 and sell it today you would earn a total of  23.00  from holding LanzaTech Global or generate 109.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Cielo Waste Solutions  vs.  LanzaTech Global

Cielo Waste Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cielo Waste Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Cielo Waste is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

LanzaTech Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LanzaTech Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, LanzaTech Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cielo Waste and LanzaTech Global

The main advantage of trading using opposite Cielo Waste and LanzaTech Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cielo Waste 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 Cielo Waste Solutions 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.