Correlation Between BG Staffing and ClearSign Combustion

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

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

Diversification Opportunities for BG Staffing and ClearSign Combustion

-0.08

Correlation Coefficient

BG Staffing  ClearSign Combustion

Good diversification

The 3 months correlation between BGSF and ClearSign is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and ClearSign Combustion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearSign Combustion and BG Staffing 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 BG Staffing 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 BG Staffing i.e., BG Staffing and ClearSign Combustion go up and down completely randomly.

Pair Corralation between BG Staffing and ClearSign Combustion

Given the investment horizon of 90 days BG Staffing is expected to generate 1.25 times less return on investment than ClearSign Combustion. But when comparing it to its historical volatility, BG Staffing is 1.62 times less risky than ClearSign Combustion. It trades about 0.11 of its potential returns per unit of risk. ClearSign Combustion is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  59.00  in ClearSign Combustion on September 6, 2025 and sell it today you would earn a total of  17.00  from holding ClearSign Combustion or generate 28.81% return on investment over 90 days.

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

BG Staffing  vs.  ClearSign Combustion

BG Staffing

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in BG Staffing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BG Staffing reported solid returns over the last few months and may actually be approaching a breakup point.

ClearSign Combustion

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ClearSign Combustion are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward indicators, ClearSign Combustion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BG Staffing and ClearSign Combustion

The main advantage of trading using opposite BG Staffing and ClearSign Combustion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing 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.

The idea behind BG Staffing 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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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.