Correlation Between DarioHealth Corp and Prenetics Global

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

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

Diversification Opportunities for DarioHealth Corp and Prenetics Global

-0.16

Correlation Coefficient

DarioHealth Corp  Prenetics Global

Good diversification

The 3 months correlation between DarioHealth and Prenetics is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DarioHealth Corp and Prenetics Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prenetics Global and DarioHealth Corp 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 DarioHealth Corp are associated (or correlated) with Prenetics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prenetics Global has no effect on the direction of DarioHealth Corp i.e., DarioHealth Corp and Prenetics Global go up and down completely randomly.

Pair Corralation between DarioHealth Corp and Prenetics Global

Given the investment horizon of 90 days DarioHealth Corp is expected to generate 1.02 times more return on investment than Prenetics Global. However, DarioHealth Corp is 1.02 times more volatile than Prenetics Global. It trades about 0.01 of its potential returns per unit of risk. Prenetics Global is currently generating about -0.01 per unit of risk. If you would invest  83.00  in DarioHealth Corp on September 2, 2024 and sell it today you would lose (4.00) from holding DarioHealth Corp or give up 4.82% of portfolio value over 90 days.

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

DarioHealth Corp  vs.  Prenetics Global

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, DarioHealth Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Prenetics Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prenetics Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Prenetics Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DarioHealth Corp and Prenetics Global

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

The idea behind DarioHealth Corp and Prenetics Global 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.