Correlation Between Catalyst Mlp and NISOURCE

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

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

Diversification Opportunities for Catalyst Mlp and NISOURCE

0.9

Correlation Coefficient

Catalyst Mlp  NISOURCE

Almost no diversification

The 3 months correlation between Catalyst and NISOURCE is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Mlp Infrastructure 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 Catalyst Mlp 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 Catalyst Mlp Infrastructure 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 Catalyst Mlp i.e., Catalyst Mlp and NISOURCE go up and down completely randomly.

Pair Corralation between Catalyst Mlp and NISOURCE

Assuming the 90 days horizon Catalyst Mlp Infrastructure is expected to generate 1.28 times more return on investment than NISOURCE. However, Catalyst Mlp is 1.28 times more volatile than NISOURCE FIN P. It trades about 0.13 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  2,566  in Catalyst Mlp Infrastructure on September 23, 2024 and sell it today you would earn a total of  248.00  from holding Catalyst Mlp Infrastructure or generate 9.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	30.77%
Values	Daily Returns

Catalyst Mlp Infrastructure  vs.  NISOURCE FIN P

Catalyst Mlp Infrast

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Mlp Infrastructure are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalyst Mlp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst Mlp and NISOURCE

The main advantage of trading using opposite Catalyst Mlp and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Mlp 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 Catalyst Mlp Infrastructure 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.