Correlation Between Alfen NV and Tecogen

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

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

Diversification Opportunities for Alfen NV and Tecogen

0.0

Correlation Coefficient

Alfen NV  Tecogen

Pay attention - limited upside

The 3 months correlation between Alfen and Tecogen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alfen NV and Tecogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecogen and Alfen NV 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 Alfen NV are associated (or correlated) with Tecogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecogen has no effect on the direction of Alfen NV i.e., Alfen NV and Tecogen go up and down completely randomly.

Pair Corralation between Alfen NV and Tecogen

If you would invest (100.00) in Tecogen on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Tecogen or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alfen NV  vs.  Tecogen

Alfen NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alfen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Alfen NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tecogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tecogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Tecogen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Alfen NV and Tecogen

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

The idea behind Alfen NV and Tecogen 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.