Correlation Between Verint Systems and ClearSign Combustion

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

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

Diversification Opportunities for Verint Systems and ClearSign Combustion

0.04

Correlation Coefficient

Verint Systems  ClearSign Combustion

Significant diversification

The 3 months correlation between Verint and ClearSign is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and ClearSign Combustion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearSign Combustion and Verint Systems 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 Verint Systems 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 Verint Systems i.e., Verint Systems and ClearSign Combustion go up and down completely randomly.

Pair Corralation between Verint Systems and ClearSign Combustion

Given the investment horizon of 90 days Verint Systems is expected to under-perform the ClearSign Combustion. But the stock apears to be less risky and, when comparing its historical volatility, Verint Systems is 3.13 times less risky than ClearSign Combustion. The stock trades about -0.03 of its potential returns per unit of risk. The ClearSign Combustion is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  53.00  in ClearSign Combustion on July 2, 2025 and sell it today you would earn a total of  28.00  from holding ClearSign Combustion or generate 52.83% return on investment over 90 days.

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

Verint Systems  vs.  ClearSign Combustion

Verint Systems

Risk-Adjusted Performance

Soft

Over the last 90 days Verint Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Verint Systems is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ClearSign Combustion

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ClearSign Combustion are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting forward indicators, ClearSign Combustion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Verint Systems and ClearSign Combustion

The main advantage of trading using opposite Verint Systems and ClearSign Combustion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verint Systems 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 Verint Systems 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.