Correlation Between West Pharmaceutical and Nyxoah
Can any of the company-specific risk be diversified away by investing in both West Pharmaceutical 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 West Pharmaceutical and Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Pharmaceutical Services and Nyxoah, you can compare the effects of market volatilities on West Pharmaceutical 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 West Pharmaceutical with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Pharmaceutical and Nyxoah.
Diversification Opportunities for West Pharmaceutical and Nyxoah
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between West and Nyxoah is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding West Pharmaceutical Services and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and West Pharmaceutical 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 West Pharmaceutical Services 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 West Pharmaceutical i.e., West Pharmaceutical and Nyxoah go up and down completely randomly.
Pair Corralation between West Pharmaceutical and Nyxoah
Considering the 90-day investment horizon West Pharmaceutical is expected to generate 2.63 times less return on investment than Nyxoah. But when comparing it to its historical volatility, West Pharmaceutical Services is 2.5 times less risky than Nyxoah. It trades about 0.04 of its potential returns per unit of risk. Nyxoah is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 533.00 in Nyxoah on September 12, 2024 and sell it today you would earn a total of 263.80 from holding Nyxoah or generate 49.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Pharmaceutical Services vs. Nyxoah
Performance |
| Timeline |
| West Pharmaceutical |
| Nyxoah |
West Pharmaceutical and Nyxoah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Pharmaceutical and Nyxoah
The main advantage of trading using opposite West Pharmaceutical and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Pharmaceutical 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.| West Pharmaceutical vs. Teleflex Incorporated | West Pharmaceutical vs. Alcon AG | West Pharmaceutical vs. ResMed Inc | West Pharmaceutical vs. ICU Medical |
| Nyxoah vs. West Pharmaceutical Services | Nyxoah vs. Alcon AG | Nyxoah vs. ResMed Inc | Nyxoah vs. ICU Medical |
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 Stocks Directory module to find actively traded stocks across global markets.
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