Correlation Between Castle Biosciences and Prenetics Global
Can any of the company-specific risk be diversified away by investing in both Castle Biosciences 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 Castle Biosciences and Prenetics Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castle Biosciences and Prenetics Global, you can compare the effects of market volatilities on Castle Biosciences 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 Castle Biosciences with a short position of Prenetics Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castle Biosciences and Prenetics Global.
Diversification Opportunities for Castle Biosciences and Prenetics Global
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Castle and Prenetics is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Castle Biosciences and Prenetics Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prenetics Global and Castle Biosciences 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 Castle Biosciences 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 Castle Biosciences i.e., Castle Biosciences and Prenetics Global go up and down completely randomly.
Pair Corralation between Castle Biosciences and Prenetics Global
Given the investment horizon of 90 days Castle Biosciences is expected to generate 1.36 times less return on investment than Prenetics Global. But when comparing it to its historical volatility, Castle Biosciences is 1.76 times less risky than Prenetics Global. It trades about 0.03 of its potential returns per unit of risk. Prenetics Global is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 457.00 in Prenetics Global on August 28, 2024 and sell it today you would lose (6.00) from holding Prenetics Global or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castle Biosciences vs. Prenetics Global
Performance |
| Timeline |
| Castle Biosciences |
| Prenetics Global |
Castle Biosciences and Prenetics Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castle Biosciences and Prenetics Global
The main advantage of trading using opposite Castle Biosciences and Prenetics Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castle Biosciences 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.| Castle Biosciences vs. Caredx Inc | Castle Biosciences vs. Twist Bioscience Corp | Castle Biosciences vs. Biodesix | Castle Biosciences vs. Natera Inc |
| Prenetics Global vs. Neogen | Prenetics Global vs. Qiagen NV | Prenetics Global vs. Aclaris Therapeutics | Prenetics Global vs. Fonar |
Check out your portfolio center.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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