Correlation Between Flex and ClearSign Combustion

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

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

Diversification Opportunities for Flex and ClearSign Combustion

-0.54

Correlation Coefficient

Flex  ClearSign Combustion

Excellent diversification

The 3 months correlation between Flex and ClearSign is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Flex and ClearSign Combustion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearSign Combustion and Flex 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 Flex 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 Flex i.e., Flex and ClearSign Combustion go up and down completely randomly.

Pair Corralation between Flex and ClearSign Combustion

Given the investment horizon of 90 days Flex is expected to generate 0.41 times more return on investment than ClearSign Combustion. However, Flex is 2.46 times less risky than ClearSign Combustion. It trades about 0.17 of its potential returns per unit of risk. ClearSign Combustion is currently generating about -0.03 per unit of risk. If you would invest  4,206  in Flex on May 14, 2025 and sell it today you would earn a total of  810.00  from holding Flex or generate 19.26% return on investment over 90 days.

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

Flex  vs.  ClearSign Combustion

Flex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flex are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Flex showed solid returns over the last few months and may actually be approaching a breakup point.

ClearSign Combustion

Risk-Adjusted Performance

Weakest

Over the last 90 days ClearSign Combustion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Flex and ClearSign Combustion

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

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.