Correlation Between Nyxoah and Sea

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

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

Diversification Opportunities for Nyxoah and Sea

-0.85

Correlation Coefficient

Nyxoah  Sea

Pay attention - limited upside

The 3 months correlation between Nyxoah and Sea is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Nyxoah i.e., Nyxoah and Sea go up and down completely randomly.

Pair Corralation between Nyxoah and Sea

Given the investment horizon of 90 days Nyxoah is expected to generate 1.15 times more return on investment than Sea. However, Nyxoah is 1.15 times more volatile than Sea. It trades about -0.03 of its potential returns per unit of risk. Sea is currently generating about -0.05 per unit of risk. If you would invest  814.00  in Nyxoah on September 27, 2024 and sell it today you would lose (14.00) from holding Nyxoah or give up 1.72% of portfolio value over 90 days.

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

Nyxoah  vs.  Sea

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Sea

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nyxoah and Sea

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

The idea behind Nyxoah and Sea 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.