Correlation Between Prenetics Global and Enzo Biochem

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

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

Diversification Opportunities for Prenetics Global and Enzo Biochem

0.08

Correlation Coefficient

Prenetics Global  Enzo Biochem

Significant diversification

The 3 months correlation between Prenetics and Enzo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Prenetics Global and Enzo Biochem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzo Biochem and Prenetics Global 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 Prenetics Global are associated (or correlated) with Enzo Biochem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzo Biochem has no effect on the direction of Prenetics Global i.e., Prenetics Global and Enzo Biochem go up and down completely randomly.

Pair Corralation between Prenetics Global and Enzo Biochem

Considering the 90-day investment horizon Prenetics Global is expected to generate 8.86 times more return on investment than Enzo Biochem. However, Prenetics Global is 8.86 times more volatile than Enzo Biochem. It trades about 0.04 of its potential returns per unit of risk. Enzo Biochem is currently generating about 0.0 per unit of risk. If you would invest  2,805  in Prenetics Global on September 2, 2024 and sell it today you would lose (2,357) from holding Prenetics Global or give up 84.03% of portfolio value over 90 days.

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

Prenetics Global  vs.  Enzo Biochem

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.

Enzo Biochem

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enzo Biochem are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Enzo Biochem is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Prenetics Global and Enzo Biochem

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

The idea behind Prenetics Global and Enzo Biochem 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.