Correlation Between DoorDash, and NISOURCE

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

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

Diversification Opportunities for DoorDash, and NISOURCE

-0.65

Correlation Coefficient

DoorDash,  NISOURCE

Excellent diversification

The 3 months correlation between DoorDash, and NISOURCE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding DoorDash, Class A and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P and DoorDash, 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 DoorDash, Class A are associated (or correlated) with NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of DoorDash, i.e., DoorDash, and NISOURCE go up and down completely randomly.

Pair Corralation between DoorDash, and NISOURCE

Given the investment horizon of 90 days DoorDash, Class A is expected to generate 1.8 times more return on investment than NISOURCE. However, DoorDash, is 1.8 times more volatile than NISOURCE FIN P. It trades about 0.19 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about -0.09 per unit of risk. If you would invest  14,208  in DoorDash, Class A on October 5, 2024 and sell it today you would earn a total of  2,857  from holding DoorDash, Class A or generate 20.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	77.05%
Values	Daily Returns

DoorDash, Class A  vs.  NISOURCE FIN P

DoorDash, Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DoorDash, Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DoorDash, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

NISOURCE FIN P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DoorDash, and NISOURCE

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

The idea behind DoorDash, Class A and NISOURCE FIN P 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..