Correlation Between Solvay SA and Nyxoah
Can any of the company-specific risk be diversified away by investing in both Solvay SA 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 Solvay SA and Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solvay SA and Nyxoah, you can compare the effects of market volatilities on Solvay SA 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 Solvay SA with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solvay SA and Nyxoah.
Diversification Opportunities for Solvay SA and Nyxoah
Poor diversification
The 3 months correlation between Solvay and Nyxoah is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Solvay SA and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Solvay SA 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 Solvay SA 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 Solvay SA i.e., Solvay SA and Nyxoah go up and down completely randomly.
Pair Corralation between Solvay SA and Nyxoah
Assuming the 90 days trading horizon Solvay SA is expected to under-perform the Nyxoah. In addition to that, Solvay SA is 1.52 times more volatile than Nyxoah. It trades about -0.32 of its total potential returns per unit of risk. Nyxoah is currently generating about -0.4 per unit of volatility. If you would invest 890.00 in Nyxoah on September 5, 2024 and sell it today you would lose (122.00) from holding Nyxoah or give up 13.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Solvay SA vs. Nyxoah
Performance |
| Timeline |
| Solvay SA |
| Nyxoah |
Solvay SA and Nyxoah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solvay SA and Nyxoah
The main advantage of trading using opposite Solvay SA and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solvay SA 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.| Solvay SA vs. Vastned Retail Belgium | Solvay SA vs. Immolease Trust NV | Solvay SA vs. Home Invest Belgium | Solvay SA vs. Keyware Technologies NV |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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