Correlation Between Microsoft and Nyxoah
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Nyxoah, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Nyxoah.
Diversification Opportunities for Microsoft and Nyxoah
Average diversification
The 3 months correlation between Microsoft and Nyxoah is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Nyxoah go up and down completely randomly.
Pair Corralation between Microsoft and Nyxoah
Given the investment horizon of 90 days Microsoft is expected to generate 0.76 times more return on investment than Nyxoah. However, Microsoft is 1.32 times less risky than Nyxoah. It trades about -0.05 of its potential returns per unit of risk. Nyxoah is currently generating about -0.4 per unit of risk. If you would invest 42,574 in Microsoft on August 27, 2024 and sell it today you would lose (874.00) from holding Microsoft or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Nyxoah
Performance |
| Timeline |
| Microsoft |
| Nyxoah |
Microsoft and Nyxoah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Nyxoah
The main advantage of trading using opposite Microsoft and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Nyxoah vs. Milestone Scientific | Nyxoah vs. Pro Dex | Nyxoah vs. InfuSystems Holdings | Nyxoah vs. Repro Med Systems |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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