Correlation Between Apple and ClearSign Combustion

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Can any of the company-specific risk be diversified away by investing in both Apple and ClearSign Combustion 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 Apple and ClearSign Combustion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and ClearSign Combustion, you can compare the effects of market volatilities on Apple and ClearSign Combustion 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 Apple with a short position of ClearSign Combustion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ClearSign Combustion.

Diversification Opportunities for Apple and ClearSign Combustion

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Apple and ClearSign is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ClearSign Combustion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearSign Combustion and Apple 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 Apple Inc are associated (or correlated) with ClearSign Combustion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearSign Combustion has no effect on the direction of Apple i.e., Apple and ClearSign Combustion go up and down completely randomly.

Pair Corralation between Apple and ClearSign Combustion

Given the investment horizon of 90 days Apple Inc is expected to generate 0.35 times more return on investment than ClearSign Combustion. However, Apple Inc is 2.88 times less risky than ClearSign Combustion. It trades about 0.12 of its potential returns per unit of risk. ClearSign Combustion is currently generating about -0.01 per unit of risk. If you would invest  13,865  in Apple Inc on September 4, 2022 and sell it today you would earn a total of  916.00  from holding Apple Inc or generate 6.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  ClearSign Combustion

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
0 of 100
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Apple is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Apple Price Channel

ClearSign Combustion 
ClearSign Performance
0 of 100
Over the last 90 days ClearSign Combustion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2023. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ClearSign Price Channel

Apple and ClearSign Combustion Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and ClearSign Combustion

The main advantage of trading using opposite Apple and ClearSign Combustion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, ClearSign Combustion 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 ClearSign Combustion will offset losses from the drop in ClearSign Combustion's long position.
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The idea behind Apple Inc and ClearSign Combustion 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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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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