Correlation Between Addus HomeCare and Nyxoah

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

By analyzing existing cross correlation between Addus HomeCare and Nyxoah, you can compare the effects of market volatilities on Addus HomeCare and Nyxoah 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 Addus HomeCare with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Nyxoah.

Diversification Opportunities for Addus HomeCare and Nyxoah

0.48

Correlation Coefficient

Addus HomeCare  Nyxoah

Very weak diversification

The 3 months correlation between Addus and Nyxoah is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Addus HomeCare 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 Addus HomeCare are associated (or correlated) with Nyxoah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyxoah has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Nyxoah go up and down completely randomly.

Pair Corralation between Addus HomeCare and Nyxoah

Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the Nyxoah. But the stock apears to be less risky and, when comparing its historical volatility, Addus HomeCare is 1.51 times less risky than Nyxoah. The stock trades about -0.03 of its potential returns per unit of risk. The Nyxoah is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  784.00  in Nyxoah on September 12, 2024 and sell it today you would earn a total of  12.80  from holding Nyxoah or generate 1.63% return on investment over 90 days.

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

Addus HomeCare  vs.  Nyxoah

Addus HomeCare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addus HomeCare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Addus HomeCare is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Nyxoah

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Nyxoah is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Addus HomeCare and Nyxoah

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

The idea behind Addus HomeCare and Nyxoah 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.