Correlation Between NiSource and Coeur DAlene

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

By analyzing existing cross correlation between NiSource and Coeur dAlene Bancorp, you can compare the effects of market volatilities on NiSource and Coeur DAlene 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 NiSource with a short position of Coeur DAlene. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Coeur DAlene.

Diversification Opportunities for NiSource and Coeur DAlene

0.56

Correlation Coefficient

NiSource  Coeur DAlene

Very weak diversification

The 3 months correlation between NiSource and Coeur is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Coeur dAlene Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur dAlene Bancorp and NiSource 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 NiSource are associated (or correlated) with Coeur DAlene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur dAlene Bancorp has no effect on the direction of NiSource i.e., NiSource and Coeur DAlene go up and down completely randomly.

Pair Corralation between NiSource and Coeur DAlene

Allowing for the 90-day total investment horizon NiSource is expected to generate 2.23 times less return on investment than Coeur DAlene. But when comparing it to its historical volatility, NiSource is 5.05 times less risky than Coeur DAlene. It trades about 0.27 of its potential returns per unit of risk. Coeur dAlene Bancorp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,679  in Coeur dAlene Bancorp on October 24, 2024 and sell it today you would earn a total of  211.00  from holding Coeur dAlene Bancorp or generate 12.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

NiSource  vs.  Coeur dAlene Bancorp

NiSource

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, NiSource may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Coeur dAlene Bancorp

Risk-Adjusted Performance

12 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur dAlene Bancorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Coeur DAlene sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NiSource and Coeur DAlene

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

The idea behind NiSource and Coeur dAlene Bancorp 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 Stocks Directory module to find actively traded stocks across global markets.