Correlation Between Nyxoah and First Horizon
Can any of the company-specific risk be diversified away by investing in both Nyxoah and First Horizon 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 Nyxoah and First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nyxoah and First Horizon, you can compare the effects of market volatilities on Nyxoah and First Horizon 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 Nyxoah with a short position of First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nyxoah and First Horizon.
Diversification Opportunities for Nyxoah and First Horizon
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nyxoah and First is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon and Nyxoah 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 Nyxoah are associated (or correlated) with First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of Nyxoah i.e., Nyxoah and First Horizon go up and down completely randomly.
Pair Corralation between Nyxoah and First Horizon
Given the investment horizon of 90 days Nyxoah is expected to generate 2.79 times more return on investment than First Horizon. However, Nyxoah is 2.79 times more volatile than First Horizon. It trades about 0.04 of its potential returns per unit of risk. First Horizon is currently generating about 0.02 per unit of risk. If you would invest 546.00 in Nyxoah on September 3, 2024 and sell it today you would earn a total of 254.00 from holding Nyxoah or generate 46.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nyxoah vs. First Horizon
Performance |
| Timeline |
| Nyxoah |
| First Horizon |
Nyxoah and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nyxoah and First Horizon
The main advantage of trading using opposite Nyxoah and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nyxoah position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.The idea behind Nyxoah and First Horizon 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.| First Horizon vs. Morgan Stanley | First Horizon vs. KeyCorp | First Horizon vs. KeyCorp | First Horizon vs. KeyCorp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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