Correlation Between Loandepot and Nyxoah

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

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

Diversification Opportunities for Loandepot and Nyxoah

-0.09

Correlation Coefficient

Loandepot  Nyxoah

Good diversification

The 3 months correlation between Loandepot and Nyxoah is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Loandepot 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 Loandepot 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 Loandepot i.e., Loandepot and Nyxoah go up and down completely randomly.

Pair Corralation between Loandepot and Nyxoah

Considering the 90-day investment horizon Loandepot is expected to generate 1.87 times more return on investment than Nyxoah. However, Loandepot is 1.87 times more volatile than Nyxoah. It trades about -0.02 of its potential returns per unit of risk. Nyxoah is currently generating about -0.17 per unit of risk. If you would invest  211.00  in Loandepot on September 21, 2024 and sell it today you would lose (14.00) from holding Loandepot or give up 6.64% of portfolio value over 90 days.

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

Loandepot  vs.  Nyxoah

Loandepot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loandepot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 Loandepot and Nyxoah

The main advantage of trading using opposite Loandepot and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot 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 Loandepot 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.