Correlation Between Nyxoah and Virco Manufacturing

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

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

Diversification Opportunities for Nyxoah and Virco Manufacturing

-0.37

Correlation Coefficient

Nyxoah  Virco Manufacturing

Very good diversification

The 3 months correlation between Nyxoah and Virco is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Nyxoah i.e., Nyxoah and Virco Manufacturing go up and down completely randomly.

Pair Corralation between Nyxoah and Virco Manufacturing

Given the investment horizon of 90 days Nyxoah is expected to under-perform the Virco Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Nyxoah is 1.17 times less risky than Virco Manufacturing. The stock trades about -0.48 of its potential returns per unit of risk. The Virco Manufacturing is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,551  in Virco Manufacturing on September 9, 2024 and sell it today you would earn a total of  80.00  from holding Virco Manufacturing or generate 5.16% return on investment over 90 days.

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

Nyxoah  vs.  Virco Manufacturing

Nyxoah

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 3 (%) 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.

Virco Manufacturing

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Nyxoah and Virco Manufacturing

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

The idea behind Nyxoah and Virco Manufacturing 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.