Correlation Between BAXALTA and Nyxoah

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

By analyzing existing cross correlation between BAXALTA INC 525 and Nyxoah, you can compare the effects of market volatilities on BAXALTA 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 BAXALTA with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAXALTA and Nyxoah.

Diversification Opportunities for BAXALTA and Nyxoah

0.65

Correlation Coefficient

BAXALTA  Nyxoah

Poor diversification

The 3 months correlation between BAXALTA and Nyxoah is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BAXALTA INC 525 and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and BAXALTA 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 BAXALTA INC 525 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 BAXALTA i.e., BAXALTA and Nyxoah go up and down completely randomly.

Pair Corralation between BAXALTA and Nyxoah

Assuming the 90 days trading horizon BAXALTA INC 525 is expected to generate 0.62 times more return on investment than Nyxoah. However, BAXALTA INC 525 is 1.61 times less risky than Nyxoah. It trades about 0.09 of its potential returns per unit of risk. Nyxoah is currently generating about -0.05 per unit of risk. If you would invest  9,605  in BAXALTA INC 525 on September 24, 2024 and sell it today you would earn a total of  188.00  from holding BAXALTA INC 525 or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.0%
Values	Daily Returns

BAXALTA INC 525  vs.  Nyxoah

BAXALTA INC 525

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAXALTA INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAXALTA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BAXALTA and Nyxoah

The main advantage of trading using opposite BAXALTA and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAXALTA 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 BAXALTA INC 525 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.