Correlation Between PHILIP and Nyxoah

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

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

Diversification Opportunities for PHILIP and Nyxoah

0.1

Correlation Coefficient

PHILIP  Nyxoah

Average diversification

The 3 months correlation between PHILIP and Nyxoah is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding PHILIP MORRIS INTL and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and PHILIP 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 PHILIP MORRIS INTL 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 PHILIP i.e., PHILIP and Nyxoah go up and down completely randomly.

Pair Corralation between PHILIP and Nyxoah

Assuming the 90 days trading horizon PHILIP MORRIS INTL is expected to generate 0.62 times more return on investment than Nyxoah. However, PHILIP MORRIS INTL is 1.61 times less risky than Nyxoah. It trades about -0.02 of its potential returns per unit of risk. Nyxoah is currently generating about -0.11 per unit of risk. If you would invest  11,066  in PHILIP MORRIS INTL on September 28, 2024 and sell it today you would lose (66.00) from holding PHILIP MORRIS INTL or give up 0.6% of portfolio value over 90 days.

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

PHILIP MORRIS INTL  vs.  Nyxoah

PHILIP MORRIS INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHILIP MORRIS INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PHILIP is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 uncertain performance in the last few months, the Stock's basic 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.

Pair Trading with PHILIP and Nyxoah

The main advantage of trading using opposite PHILIP and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHILIP 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 PHILIP MORRIS INTL 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.