Correlation Between Tecogen and PureTech Health

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

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

Diversification Opportunities for Tecogen and PureTech Health

0.29

Correlation Coefficient

Tecogen  PureTech Health

Modest diversification

The 3 months correlation between Tecogen and PureTech is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tecogen and PureTech Health PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PureTech Health PLC 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 PureTech Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PureTech Health PLC has no effect on the direction of Tecogen i.e., Tecogen and PureTech Health go up and down completely randomly.

Pair Corralation between Tecogen and PureTech Health

Given the investment horizon of 90 days Tecogen is expected to generate 3.38 times more return on investment than PureTech Health. However, Tecogen is 3.38 times more volatile than PureTech Health PLC. It trades about 0.2 of its potential returns per unit of risk. PureTech Health PLC is currently generating about 0.05 per unit of risk. If you would invest  340.00  in Tecogen on May 8, 2025 and sell it today you would earn a total of  508.00  from holding Tecogen or generate 149.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Tecogen  vs.  PureTech Health PLC

Tecogen

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tecogen are ranked lower than 15 (%) 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.

PureTech Health PLC

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in PureTech Health PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, PureTech Health may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tecogen and PureTech Health

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

The idea behind Tecogen and PureTech Health PLC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.