Correlation Between Hudson Technologies and Nyxoah

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

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

Diversification Opportunities for Hudson Technologies and Nyxoah

0.7

Correlation Coefficient

Hudson Technologies  Nyxoah

Poor diversification

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

Pair Corralation between Hudson Technologies and Nyxoah

Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Nyxoah. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 1.85 times less risky than Nyxoah. The stock trades about 0.0 of its potential returns per unit of risk. The Nyxoah is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  797.00  in Nyxoah on October 11, 2024 and sell it today you would earn a total of  180.00  from holding Nyxoah or generate 22.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Hudson Technologies  vs.  Nyxoah

Hudson Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nyxoah

Risk-Adjusted Performance

1 of 100

Weak

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 Hudson Technologies and Nyxoah

The main advantage of trading using opposite Hudson Technologies and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson 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 Hudson 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.