Correlation Between NETGEAR and Nyxoah

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

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

Diversification Opportunities for NETGEAR and Nyxoah

-0.59

Correlation Coefficient

NETGEAR  Nyxoah

Excellent diversification

The 3 months correlation between NETGEAR and Nyxoah is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and NETGEAR 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 NETGEAR 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 NETGEAR i.e., NETGEAR and Nyxoah go up and down completely randomly.

Pair Corralation between NETGEAR and Nyxoah

Given the investment horizon of 90 days NETGEAR is expected to generate 0.97 times more return on investment than Nyxoah. However, NETGEAR is 1.04 times less risky than Nyxoah. It trades about 0.15 of its potential returns per unit of risk. Nyxoah is currently generating about -0.02 per unit of risk. If you would invest  2,091  in NETGEAR on September 17, 2024 and sell it today you would earn a total of  468.00  from holding NETGEAR or generate 22.38% return on investment over 90 days.

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

NETGEAR  vs.  Nyxoah

NETGEAR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, NETGEAR reported 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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with NETGEAR and Nyxoah

The main advantage of trading using opposite NETGEAR and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR 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 NETGEAR 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.