Correlation Between Clean Science and General Insurance

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

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

Diversification Opportunities for Clean Science and General Insurance

-0.56

Correlation Coefficient

Clean Science  General Insurance

Excellent diversification

The 3 months correlation between Clean and General is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science and and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and Clean Science 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 Clean Science and are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Clean Science i.e., Clean Science and General Insurance go up and down completely randomly.

Pair Corralation between Clean Science and General Insurance

Assuming the 90 days trading horizon Clean Science and is expected to generate 1.41 times more return on investment than General Insurance. However, Clean Science is 1.41 times more volatile than General Insurance. It trades about 0.07 of its potential returns per unit of risk. General Insurance is currently generating about -0.1 per unit of risk. If you would invest  119,430  in Clean Science and on April 25, 2025 and sell it today you would earn a total of  11,050  from holding Clean Science and or generate 9.25% return on investment over 90 days.

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

Clean Science and  vs.  General Insurance

Clean Science

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Science and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Clean Science may actually be approaching a critical reversion point that can send shares even higher in August 2025.

General Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Clean Science and General Insurance

The main advantage of trading using opposite Clean Science and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Science position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.

The idea behind Clean Science and and General Insurance 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.