Correlation Between Guangdong Investment and Nyxoah

Can any of the company-specific risk be diversified away by investing in both Guangdong Investment 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 Guangdong Investment and Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guangdong Investment Limited and Nyxoah, you can compare the effects of market volatilities on Guangdong Investment 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 Guangdong Investment with a short position of Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Nyxoah.

Diversification Opportunities for Guangdong Investment and Nyxoah

0.71

Correlation Coefficient

Guangdong Investment  Nyxoah

Poor diversification

The 3 months correlation between Guangdong and Nyxoah is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Guangdong Investment 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 Guangdong Investment Limited 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 Guangdong Investment i.e., Guangdong Investment and Nyxoah go up and down completely randomly.

Pair Corralation between Guangdong Investment and Nyxoah

Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 0.91 times more return on investment than Nyxoah. However, Guangdong Investment Limited is 1.1 times less risky than Nyxoah. It trades about 0.08 of its potential returns per unit of risk. Nyxoah is currently generating about 0.02 per unit of risk. If you would invest  55.00  in Guangdong Investment Limited on September 12, 2024 and sell it today you would earn a total of  6.00  from holding Guangdong Investment Limited or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Guangdong Investment Limited  vs.  Nyxoah

Guangdong Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guangdong Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nyxoah

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Nyxoah is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Guangdong Investment and Nyxoah

The main advantage of trading using opposite Guangdong Investment and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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.

The idea behind Guangdong Investment Limited and Nyxoah 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.