Correlation Between Herc Holdings and Nyxoah

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

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

Diversification Opportunities for Herc Holdings and Nyxoah

-0.32

Correlation Coefficient

Herc Holdings  Nyxoah

Very good diversification

The 3 months correlation between Herc and Nyxoah is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Herc Holdings and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Herc Holdings 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 Herc Holdings 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 Herc Holdings i.e., Herc Holdings and Nyxoah go up and down completely randomly.

Pair Corralation between Herc Holdings and Nyxoah

Considering the 90-day investment horizon Herc Holdings is expected to generate 1.73 times more return on investment than Nyxoah. However, Herc Holdings is 1.73 times more volatile than Nyxoah. It trades about 0.07 of its potential returns per unit of risk. Nyxoah is currently generating about -0.17 per unit of risk. If you would invest  16,853  in Herc Holdings on September 21, 2024 and sell it today you would earn a total of  1,517  from holding Herc Holdings or generate 9.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Herc Holdings  vs.  Nyxoah

Herc Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Herc Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Herc Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Nyxoah

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nyxoah has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Herc Holdings and Nyxoah

The main advantage of trading using opposite Herc Holdings and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herc Holdings 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 Herc Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.