Correlation Between Nyxoah and Medirom Healthcare

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

By analyzing existing cross correlation between Nyxoah and Medirom Healthcare Technologies, you can compare the effects of market volatilities on Nyxoah and Medirom Healthcare 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 Medirom Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nyxoah and Medirom Healthcare.

Diversification Opportunities for Nyxoah and Medirom Healthcare

-0.46

Correlation Coefficient

Nyxoah  Medirom Healthcare

Very good diversification

The 3 months correlation between Nyxoah and Medirom is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nyxoah and Medirom Healthcare Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medirom Healthcare 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 Medirom Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medirom Healthcare has no effect on the direction of Nyxoah i.e., Nyxoah and Medirom Healthcare go up and down completely randomly.

Pair Corralation between Nyxoah and Medirom Healthcare

Given the investment horizon of 90 days Nyxoah is expected to generate 0.64 times more return on investment than Medirom Healthcare. However, Nyxoah is 1.57 times less risky than Medirom Healthcare. It trades about 0.06 of its potential returns per unit of risk. Medirom Healthcare Technologies is currently generating about 0.01 per unit of risk. If you would invest  500.00  in Nyxoah on August 19, 2024 and sell it today you would earn a total of  322.00  from holding Nyxoah or generate 64.4% return on investment over 90 days.

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

Nyxoah  vs.  Medirom Healthcare Technologie

Nyxoah

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nyxoah are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Nyxoah may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Medirom Healthcare

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Medirom Healthcare Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Medirom Healthcare displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nyxoah and Medirom Healthcare

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

The idea behind Nyxoah and Medirom Healthcare Technologies 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.