Correlation Between PepGen and Alpha Teknova

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

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

Diversification Opportunities for PepGen and Alpha Teknova

-0.23

Correlation Coefficient

PepGen  Alpha Teknova

Very good diversification

The 3 months correlation between PepGen and Alpha is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PepGen and Alpha Teknova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Teknova and PepGen 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 PepGen are associated (or correlated) with Alpha Teknova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Teknova has no effect on the direction of PepGen i.e., PepGen and Alpha Teknova go up and down completely randomly.

Pair Corralation between PepGen and Alpha Teknova

Given the investment horizon of 90 days PepGen is expected to generate 2.92 times more return on investment than Alpha Teknova. However, PepGen is 2.92 times more volatile than Alpha Teknova. It trades about -0.04 of its potential returns per unit of risk. Alpha Teknova is currently generating about -0.15 per unit of risk. If you would invest  383.00  in PepGen on December 28, 2024 and sell it today you would lose (235.00) from holding PepGen or give up 61.36% of portfolio value over 90 days.

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

PepGen  vs.  Alpha Teknova

PepGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days PepGen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Alpha Teknova

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha Teknova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PepGen and Alpha Teknova

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

The idea behind PepGen and Alpha Teknova 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 Anywhere module to track or share privately all of your investments from the convenience of any device.