Correlation Between CECO Environmental and Nyxoah
Can any of the company-specific risk be diversified away by investing in both CECO Environmental 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 CECO Environmental and Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO Environmental Corp and Nyxoah, you can compare the effects of market volatilities on CECO Environmental 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 CECO Environmental with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Nyxoah.
Diversification Opportunities for CECO Environmental and Nyxoah
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Nyxoah is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and CECO Environmental 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 CECO Environmental Corp 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 CECO Environmental i.e., CECO Environmental and Nyxoah go up and down completely randomly.
Pair Corralation between CECO Environmental and Nyxoah
Given the investment horizon of 90 days CECO Environmental is expected to generate 1.02 times less return on investment than Nyxoah. But when comparing it to its historical volatility, CECO Environmental Corp is 1.76 times less risky than Nyxoah. It trades about 0.08 of its potential returns per unit of risk. Nyxoah is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 480.00 in Nyxoah on August 26, 2024 and sell it today you would earn a total of 320.00 from holding Nyxoah or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Nyxoah
Performance |
| Timeline |
| CECO Environmental Corp |
| Nyxoah |
CECO Environmental and Nyxoah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Nyxoah
The main advantage of trading using opposite CECO Environmental and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental 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.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. 374Water Common Stock |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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