Correlation Between Montana Technologies and Nyxoah

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

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

Diversification Opportunities for Montana Technologies and Nyxoah

-0.7

Correlation Coefficient

Montana Technologies  Nyxoah

Excellent diversification

The 3 months correlation between Montana and Nyxoah is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Montana Technologies and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Montana Technologies 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 Montana Technologies 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 Montana Technologies i.e., Montana Technologies and Nyxoah go up and down completely randomly.

Pair Corralation between Montana Technologies and Nyxoah

Assuming the 90 days horizon Montana Technologies is expected to generate 3.54 times more return on investment than Nyxoah. However, Montana Technologies is 3.54 times more volatile than Nyxoah. It trades about 0.21 of its potential returns per unit of risk. Nyxoah is currently generating about 0.32 per unit of risk. If you would invest  83.00  in Montana Technologies on October 6, 2024 and sell it today you would earn a total of  35.00  from holding Montana Technologies or generate 42.17% return on investment over 90 days.

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

Montana Technologies  vs.  Nyxoah

Montana Technologies

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Montana Technologies are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward-looking indicators, Montana Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Nyxoah

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nyxoah has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Montana Technologies and Nyxoah

The main advantage of trading using opposite Montana Technologies and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montana Technologies 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 Montana Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.