Correlation Between Zapp Electric and Nyxoah

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

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

Diversification Opportunities for Zapp Electric and Nyxoah

0.47

Correlation Coefficient

Zapp Electric  Nyxoah

Very weak diversification

The 3 months correlation between Zapp and Nyxoah is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Zapp Electric Vehicles and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Zapp Electric 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 Zapp Electric Vehicles 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 Zapp Electric i.e., Zapp Electric and Nyxoah go up and down completely randomly.

Pair Corralation between Zapp Electric and Nyxoah

Assuming the 90 days horizon Zapp Electric is expected to generate 1.36 times less return on investment than Nyxoah. In addition to that, Zapp Electric is 2.52 times more volatile than Nyxoah. It trades about 0.03 of its total potential returns per unit of risk. Nyxoah is currently generating about 0.1 per unit of volatility. If you would invest  904.00  in Nyxoah on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Nyxoah or generate 11.06% return on investment over 90 days.

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

Zapp Electric Vehicles  vs.  Nyxoah

Zapp Electric Vehicles

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zapp Electric Vehicles are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Zapp Electric showed solid returns over the last few months and may actually be approaching a breakup point.

Nyxoah

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 10 (%) 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.

Pair Trading with Zapp Electric and Nyxoah

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

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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 Transaction History module to view history of all your transactions and understand their impact on performance.