Correlation Between Albemarle and Nyxoah

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

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

Diversification Opportunities for Albemarle and Nyxoah

-0.4

Correlation Coefficient

Albemarle  Nyxoah

Very good diversification

The 3 months correlation between Albemarle and Nyxoah is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Albemarle and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Albemarle 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 Albemarle 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 Albemarle i.e., Albemarle and Nyxoah go up and down completely randomly.

Pair Corralation between Albemarle and Nyxoah

Assuming the 90 days trading horizon Albemarle is expected to under-perform the Nyxoah. But the stock apears to be less risky and, when comparing its historical volatility, Albemarle is 1.42 times less risky than Nyxoah. The stock trades about -0.04 of its potential returns per unit of risk. The Nyxoah is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Nyxoah on December 22, 2024 and sell it today you would earn a total of  336.00  from holding Nyxoah or generate 42.0% return on investment over 90 days.

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

Albemarle  vs.  Nyxoah

Albemarle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Albemarle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Albemarle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nyxoah

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Nyxoah demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Albemarle and Nyxoah

The main advantage of trading using opposite Albemarle and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albemarle 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 Albemarle 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.