Correlation Between Nyxoah and Burning Rock

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

By analyzing existing cross correlation between Nyxoah and Burning Rock Biotech, you can compare the effects of market volatilities on Nyxoah and Burning Rock 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 Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nyxoah and Burning Rock.

Diversification Opportunities for Nyxoah and Burning Rock

-0.19

Correlation Coefficient

Nyxoah  Burning Rock

Good diversification

The 3 months correlation between Nyxoah and Burning is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and Burning Rock Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock Biotech 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 Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock Biotech has no effect on the direction of Nyxoah i.e., Nyxoah and Burning Rock go up and down completely randomly.

Pair Corralation between Nyxoah and Burning Rock

Given the investment horizon of 90 days Nyxoah is expected to generate 0.6 times more return on investment than Burning Rock. However, Nyxoah is 1.67 times less risky than Burning Rock. It trades about 0.2 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about -0.02 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  346.00  from holding Nyxoah or generate 43.2% return on investment over 90 days.

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

Nyxoah  vs.  Burning Rock Biotech

Nyxoah

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 16 (%) 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.

Burning Rock Biotech

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Nyxoah and Burning Rock

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

The idea behind Nyxoah and Burning Rock Biotech 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.