Correlation Between Nyxoah and Align Technology

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

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

Diversification Opportunities for Nyxoah and Align Technology

0.49

Correlation Coefficient

Nyxoah  Align Technology

Very weak diversification

The 3 months correlation between Nyxoah and Align is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Nyxoah 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 Nyxoah are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Nyxoah i.e., Nyxoah and Align Technology go up and down completely randomly.

Pair Corralation between Nyxoah and Align Technology

Given the investment horizon of 90 days Nyxoah is expected to under-perform the Align Technology. In addition to that, Nyxoah is 2.88 times more volatile than Align Technology. It trades about -0.11 of its total potential returns per unit of risk. Align Technology is currently generating about -0.08 per unit of volatility. If you would invest  31,965  in Align Technology on January 29, 2024 and sell it today you would lose (1,063) from holding Align Technology or give up 3.33% of portfolio value over 90 days.

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

Nyxoah  vs.  Align Technology

Nyxoah

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Nyxoah may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Align Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Align Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Align Technology displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nyxoah and Align Technology

The main advantage of trading using opposite Nyxoah and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nyxoah position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.

The idea behind Nyxoah and Align Technology 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.