Correlation Between Visa and Nyxoah

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

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

Diversification Opportunities for Visa and Nyxoah

-0.54

Correlation Coefficient

Visa  Nyxoah

Excellent diversification

The 3 months correlation between Visa and Nyxoah is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah and Visa 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 Visa Class A 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 Visa i.e., Visa and Nyxoah go up and down completely randomly.

Pair Corralation between Visa and Nyxoah

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.48 times more return on investment than Nyxoah. However, Visa Class A is 2.08 times less risky than Nyxoah. It trades about 0.23 of its potential returns per unit of risk. Nyxoah is currently generating about 0.04 per unit of risk. If you would invest  27,226  in Visa Class A on September 24, 2024 and sell it today you would earn a total of  4,545  from holding Visa Class A or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Visa Class A  vs.  Nyxoah

Visa Class A

Risk-Adjusted Performance

17 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Nyxoah

Risk-Adjusted Performance

2 of 100

Insignificant

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 Visa and Nyxoah

The main advantage of trading using opposite Visa and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.