Correlation Between Tecogen and Alfen NV

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

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

Diversification Opportunities for Tecogen and Alfen NV

-0.15

Correlation Coefficient

Tecogen  Alfen NV

Good diversification

The 3 months correlation between Tecogen and Alfen is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tecogen and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and Tecogen 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 Tecogen are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Tecogen i.e., Tecogen and Alfen NV go up and down completely randomly.

Pair Corralation between Tecogen and Alfen NV

If you would invest  107.00  in Tecogen on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Tecogen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Tecogen  vs.  Alfen NV

Tecogen

Risk-Adjusted Performance

0 of 100

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.

Alfen NV

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tecogen and Alfen NV

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

The idea behind Tecogen and Alfen NV 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.