Correlation Between Fonar and Prenetics Global

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

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

Diversification Opportunities for Fonar and Prenetics Global

-0.23

Correlation Coefficient

Fonar  Prenetics Global

Very good diversification

The 3 months correlation between Fonar and Prenetics is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Fonar and Prenetics Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prenetics Global and Fonar 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 Fonar 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 Fonar i.e., Fonar and Prenetics Global go up and down completely randomly.

Pair Corralation between Fonar and Prenetics Global

Given the investment horizon of 90 days Fonar is expected to generate 0.44 times more return on investment than Prenetics Global. However, Fonar is 2.28 times less risky than Prenetics Global. It trades about 0.0 of its potential returns per unit of risk. Prenetics Global is currently generating about -0.01 per unit of risk. If you would invest  1,681  in Fonar on September 3, 2024 and sell it today you would lose (34.00) from holding Fonar or give up 2.02% of portfolio value over 90 days.

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

Fonar  vs.  Prenetics Global

Fonar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fonar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 Fonar and Prenetics Global

The main advantage of trading using opposite Fonar and Prenetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonar 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 Fonar 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..