Correlation Between Eyenovia and NLS Pharmaceutics

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

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

Diversification Opportunities for Eyenovia and NLS Pharmaceutics

0.36

Correlation Coefficient

Eyenovia  NLS Pharmaceutics

Weak diversification

The 3 months correlation between Eyenovia and NLS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eyenovia and NLS Pharmaceutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLS Pharmaceutics and Eyenovia 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 Eyenovia are associated (or correlated) with NLS Pharmaceutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLS Pharmaceutics has no effect on the direction of Eyenovia i.e., Eyenovia and NLS Pharmaceutics go up and down completely randomly.

Pair Corralation between Eyenovia and NLS Pharmaceutics

Given the investment horizon of 90 days Eyenovia is expected to under-perform the NLS Pharmaceutics. In addition to that, Eyenovia is 1.01 times more volatile than NLS Pharmaceutics AG. It trades about -0.17 of its total potential returns per unit of risk. NLS Pharmaceutics AG is currently generating about 0.01 per unit of volatility. If you would invest  195.00  in NLS Pharmaceutics AG on December 20, 2024 and sell it today you would lose (39.00) from holding NLS Pharmaceutics AG or give up 20.0% of portfolio value over 90 days.

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

Eyenovia  vs.  NLS Pharmaceutics AG

Eyenovia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eyenovia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NLS Pharmaceutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days NLS Pharmaceutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NLS Pharmaceutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eyenovia and NLS Pharmaceutics

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

The idea behind Eyenovia and NLS Pharmaceutics AG 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.