Correlation Between Prenetics Global and Affiliated Managers

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

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

Diversification Opportunities for Prenetics Global and Affiliated Managers

-0.86

Correlation Coefficient

Prenetics Global  Affiliated Managers

Pay attention - limited upside

The 3 months correlation between Prenetics and Affiliated is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Prenetics Global and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Prenetics Global i.e., Prenetics Global and Affiliated Managers go up and down completely randomly.

Pair Corralation between Prenetics Global and Affiliated Managers

Considering the 90-day investment horizon Prenetics Global is expected to under-perform the Affiliated Managers. In addition to that, Prenetics Global is 7.57 times more volatile than Affiliated Managers Group. It trades about -0.08 of its total potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.23 per unit of volatility. If you would invest  2,259  in Affiliated Managers Group on July 16, 2024 and sell it today you would earn a total of  235.00  from holding Affiliated Managers Group or generate 10.4% return on investment over 90 days.

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

Prenetics Global  vs.  Affiliated Managers Group

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 fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in November 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Affiliated Managers

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Affiliated Managers may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Prenetics Global and Affiliated Managers

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

The idea behind Prenetics Global and Affiliated Managers 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.