Correlation Between Linkers Industries and Tecogen

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

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

Diversification Opportunities for Linkers Industries and Tecogen

-0.22

Correlation Coefficient

Linkers Industries  Tecogen

Very good diversification

The 3 months correlation between Linkers and Tecogen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Linkers Industries Limited and Tecogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecogen and Linkers Industries 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 Linkers Industries Limited 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 Linkers Industries i.e., Linkers Industries and Tecogen go up and down completely randomly.

Pair Corralation between Linkers Industries and Tecogen

Given the investment horizon of 90 days Linkers Industries is expected to generate 85.32 times less return on investment than Tecogen. But when comparing it to its historical volatility, Linkers Industries Limited is 2.04 times less risky than Tecogen. It trades about 0.01 of its potential returns per unit of risk. Tecogen is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  310.00  in Tecogen on May 5, 2025 and sell it today you would earn a total of  608.00  from holding Tecogen or generate 196.13% return on investment over 90 days.

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

Linkers Industries Limited  vs.  Tecogen

Linkers Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Linkers Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Linkers Industries is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Tecogen

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tecogen are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Tecogen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Linkers Industries and Tecogen

The main advantage of trading using opposite Linkers Industries and Tecogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linkers Industries 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 Linkers Industries Limited 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.