Correlation Between Tecogen and Polydex Pharmaceuticals

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

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

Diversification Opportunities for Tecogen and Polydex Pharmaceuticals

-0.18

Correlation Coefficient

Tecogen  Polydex Pharmaceuticals

Good diversification

The 3 months correlation between Tecogen and Polydex is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tecogen and Polydex Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polydex Pharmaceuticals 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 Polydex Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polydex Pharmaceuticals has no effect on the direction of Tecogen i.e., Tecogen and Polydex Pharmaceuticals go up and down completely randomly.

Pair Corralation between Tecogen and Polydex Pharmaceuticals

If you would invest  196.00  in Polydex Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Polydex Pharmaceuticals or generate 0.0% return on investment over 90 days.

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

Tecogen  vs.  Polydex Pharmaceuticals

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.

Polydex Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polydex Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Polydex Pharmaceuticals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tecogen and Polydex Pharmaceuticals

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

The idea behind Tecogen and Polydex Pharmaceuticals 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.