Correlation Between Prenetics Global and Neogen

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

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

Diversification Opportunities for Prenetics Global and Neogen

-0.3

Correlation Coefficient

Prenetics Global  Neogen

Very good diversification

The 3 months correlation between Prenetics and Neogen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Prenetics Global and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Prenetics Global i.e., Prenetics Global and Neogen go up and down completely randomly.

Pair Corralation between Prenetics Global and Neogen

Considering the 90-day investment horizon Prenetics Global is expected to generate 1.89 times more return on investment than Neogen. However, Prenetics Global is 1.89 times more volatile than Neogen. It trades about -0.01 of its potential returns per unit of risk. Neogen is currently generating about -0.06 per unit of risk. If you would invest  500.00  in Prenetics Global on September 3, 2024 and sell it today you would lose (52.00) from holding Prenetics Global or give up 10.4% of portfolio value over 90 days.

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

Prenetics Global  vs.  Neogen

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.

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Prenetics Global and Neogen

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

The idea behind Prenetics Global and Neogen 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.