Correlation Between Nyxoah and American Vanguard

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

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

Diversification Opportunities for Nyxoah and American Vanguard

0.57

Correlation Coefficient

Nyxoah  American Vanguard

Very weak diversification

The 3 months correlation between Nyxoah and American is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and American Vanguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Vanguard and Nyxoah 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 Nyxoah are associated (or correlated) with American Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Vanguard has no effect on the direction of Nyxoah i.e., Nyxoah and American Vanguard go up and down completely randomly.

Pair Corralation between Nyxoah and American Vanguard

Given the investment horizon of 90 days Nyxoah is expected to generate 0.92 times more return on investment than American Vanguard. However, Nyxoah is 1.08 times less risky than American Vanguard. It trades about 0.19 of its potential returns per unit of risk. American Vanguard is currently generating about 0.07 per unit of risk. If you would invest  801.00  in Nyxoah on December 20, 2024 and sell it today you would earn a total of  304.00  from holding Nyxoah or generate 37.95% return on investment over 90 days.

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

Nyxoah  vs.  American Vanguard

Nyxoah

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 14 (%) 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.

American Vanguard

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Vanguard are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, American Vanguard exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nyxoah and American Vanguard

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

The idea behind Nyxoah and American Vanguard 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.