Correlation Between Galaxy Gaming and NISOURCE

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

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

Diversification Opportunities for Galaxy Gaming and NISOURCE

0.04

Correlation Coefficient

Galaxy Gaming  NISOURCE

Significant diversification

The 3 months correlation between Galaxy and NISOURCE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Gaming 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 Galaxy Gaming 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 Galaxy Gaming 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 Galaxy Gaming i.e., Galaxy Gaming and NISOURCE go up and down completely randomly.

Pair Corralation between Galaxy Gaming and NISOURCE

Given the investment horizon of 90 days Galaxy Gaming is expected to under-perform the NISOURCE. But the otc stock apears to be less risky and, when comparing its historical volatility, Galaxy Gaming is 1.92 times less risky than NISOURCE. The otc stock trades about -0.09 of its potential returns per unit of risk. The NISOURCE FIN P is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  8,062  in NISOURCE FIN P on October 9, 2024 and sell it today you would lose (4.00) from holding NISOURCE FIN P or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	73.68%
Values	Daily Returns

Galaxy Gaming  vs.  NISOURCE FIN P

Galaxy Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galaxy Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Galaxy Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NISOURCE FIN P

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NISOURCE FIN P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NISOURCE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Galaxy Gaming and NISOURCE

The main advantage of trading using opposite Galaxy Gaming and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Gaming 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 Galaxy Gaming 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.