Correlation Between Prenetics Global and Ucloudlink

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

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

Diversification Opportunities for Prenetics Global and Ucloudlink

0.5

Correlation Coefficient

Prenetics Global  Ucloudlink

Very weak diversification

The 3 months correlation between Prenetics and Ucloudlink is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Prenetics Global and Ucloudlink Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucloudlink Group 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 Ucloudlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ucloudlink Group has no effect on the direction of Prenetics Global i.e., Prenetics Global and Ucloudlink go up and down completely randomly.

Pair Corralation between Prenetics Global and Ucloudlink

Considering the 90-day investment horizon Prenetics Global is expected to generate 0.64 times more return on investment than Ucloudlink. However, Prenetics Global is 1.57 times less risky than Ucloudlink. It trades about -0.17 of its potential returns per unit of risk. Ucloudlink Group is currently generating about -0.17 per unit of risk. If you would invest  583.00  in Prenetics Global on December 30, 2024 and sell it today you would lose (183.00) from holding Prenetics Global or give up 31.39% of portfolio value over 90 days.

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

Prenetics Global  vs.  Ucloudlink Group

Prenetics Global

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ucloudlink Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ucloudlink Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Prenetics Global and Ucloudlink

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

The idea behind Prenetics Global and Ucloudlink Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.