Correlation Between FMC and NISOURCE
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By analyzing existing cross correlation between FMC Corporation and NISOURCE INC, you can compare the effects of market volatilities on FMC 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 FMC with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FMC and NISOURCE.
Diversification Opportunities for FMC and NISOURCE
Significant diversification
The 3 months correlation between FMC and NISOURCE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding FMC Corp. and NISOURCE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE INC and FMC 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 FMC Corporation 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 INC has no effect on the direction of FMC i.e., FMC and NISOURCE go up and down completely randomly.
Pair Corralation between FMC and NISOURCE
Considering the 90-day investment horizon FMC Corporation is expected to generate 2.53 times more return on investment than NISOURCE. However, FMC is 2.53 times more volatile than NISOURCE INC. It trades about 0.35 of its potential returns per unit of risk. NISOURCE INC is currently generating about -0.19 per unit of risk. If you would invest 3,510 in FMC Corporation on December 11, 2024 and sell it today you would earn a total of 648.00 from holding FMC Corporation or generate 18.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FMC Corp. vs. NISOURCE INC
Performance |
Timeline |
FMC Corporation |
NISOURCE INC |
FMC and NISOURCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FMC and NISOURCE
The main advantage of trading using opposite FMC and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FMC 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 FMC Corporation and NISOURCE INC 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.NISOURCE vs. Playtech plc | NISOURCE vs. Air Transport Services | NISOURCE vs. Starwin Media Holdings | NISOURCE vs. Emerson Radio |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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