Correlation Between Tecogen and Twin Ridge

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

By analyzing existing cross correlation between Tecogen and Twin Ridge Capital, you can compare the effects of market volatilities on Tecogen and Twin Ridge 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 Twin Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tecogen and Twin Ridge.

Diversification Opportunities for Tecogen and Twin Ridge

0.0

Correlation Coefficient

Tecogen  Twin Ridge

Pay attention - limited upside

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

Pair Corralation between Tecogen and Twin Ridge

If you would invest (100.00) in Twin Ridge Capital on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Twin Ridge Capital or generate -100.0% return on investment over 90 days.

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

Tecogen  vs.  Twin Ridge Capital

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.

Twin Ridge Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Twin Ridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Twin Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tecogen and Twin Ridge

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

The idea behind Tecogen and Twin Ridge Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .