Correlation Between UCB SA and Nyxoah

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

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

Diversification Opportunities for UCB SA and Nyxoah

-0.29

Correlation Coefficient

UCB SA  Nyxoah

Very good diversification

The 3 months correlation between UCB and Nyxoah is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding UCB SA and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and UCB 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 UCB 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 UCB SA i.e., UCB SA and Nyxoah go up and down completely randomly.

Pair Corralation between UCB SA and Nyxoah

Assuming the 90 days trading horizon UCB SA is expected to generate 0.29 times more return on investment than Nyxoah. However, UCB SA is 3.47 times less risky than Nyxoah. It trades about 0.18 of its potential returns per unit of risk. Nyxoah is currently generating about 0.04 per unit of risk. If you would invest  7,725  in UCB SA on September 26, 2024 and sell it today you would earn a total of  11,215  from holding UCB SA or generate 145.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

UCB SA  vs.  Nyxoah

UCB SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UCB SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, UCB SA reported solid returns over the last few months and may actually be approaching a breakup point.

Nyxoah

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nyxoah is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UCB SA and Nyxoah

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

The idea behind UCB SA 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.