Correlation Between Utah Medical and Nyxoah

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

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

Diversification Opportunities for Utah Medical and Nyxoah

0.14

Correlation Coefficient

Utah Medical  Nyxoah

Average diversification

The 3 months correlation between Utah and Nyxoah is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Utah Medical 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 Utah Medical Products 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 Utah Medical i.e., Utah Medical and Nyxoah go up and down completely randomly.

Pair Corralation between Utah Medical and Nyxoah

Given the investment horizon of 90 days Utah Medical Products is expected to generate 0.38 times more return on investment than Nyxoah. However, Utah Medical Products is 2.66 times less risky than Nyxoah. It trades about -0.35 of its potential returns per unit of risk. Nyxoah is currently generating about -0.19 per unit of risk. If you would invest  6,835  in Utah Medical Products on September 13, 2024 and sell it today you would lose (440.00) from holding Utah Medical Products or give up 6.44% of portfolio value over 90 days.

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

Utah Medical Products  vs.  Nyxoah

Utah Medical Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utah Medical Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Utah Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nyxoah

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 1 (%) 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.

Pair Trading with Utah Medical and Nyxoah

The main advantage of trading using opposite Utah Medical and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utah Medical 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 Utah Medical Products 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.