Correlation Between Gulf Island and NISOURCE
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By analyzing existing cross correlation between Gulf Island Fabrication and NISOURCE FIN P, you can compare the effects of market volatilities on Gulf Island 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 Gulf Island with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Island and NISOURCE.
Diversification Opportunities for Gulf Island and NISOURCE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gulf and NISOURCE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Island Fabrication 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 Gulf Island 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 Gulf Island Fabrication 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 Gulf Island i.e., Gulf Island and NISOURCE go up and down completely randomly.
Pair Corralation between Gulf Island and NISOURCE
Given the investment horizon of 90 days Gulf Island Fabrication is expected to generate 3.52 times more return on investment than NISOURCE. However, Gulf Island is 3.52 times more volatile than NISOURCE FIN P. It trades about 0.11 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about -0.03 per unit of risk. If you would invest 556.00 in Gulf Island Fabrication on September 23, 2024 and sell it today you would earn a total of 130.00 from holding Gulf Island Fabrication or generate 23.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 30.77% |
Values | Daily Returns |
Gulf Island Fabrication vs. NISOURCE FIN P
Performance |
Timeline |
Gulf Island Fabrication |
NISOURCE FIN P |
Gulf Island and NISOURCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gulf Island and NISOURCE
The main advantage of trading using opposite Gulf Island and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Island 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.Gulf Island vs. Insteel Industries | Gulf Island vs. Mayville Engineering Co | Gulf Island vs. ESAB Corp | Gulf Island vs. Northwest Pipe |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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