Water Melon is very low in Saturated Fat, Cholesterol and Sodium and good source of minerals potassium, dietary fiber and a very good source of Vitamin A and Vitamin C. It also contains several minerals, vitamins and protein. Only bad thing about this fruit for diabetic people is A large portion of the calories in this food come from sugars and sugars(carbohydrate) is bad for diabetes.
In diabetes it is myth that diabetic people should not eat Water Malon(sweet fruits). Fact is that total amount of carbohydrate in a food affect blood sugar is more than other sources of carbohydrate like sugar. For diabetic people one serving of fruit should contain 15 gm carbohydrate. The size of the serving depends on the carbohydrate content of the fruit. If some fruit contains less carbohydrate then that can be eaten in more quantity.
11/4 cup (190 grams) cubed watermelon contains 15 gm carbohydrate. So you can eat 11/4 Water Melon. but you have to cut other carbohydrate intake to balance your diet.