Correlation Between NiSource and MoneyHero Limited

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

By analyzing existing cross correlation between NiSource and MoneyHero Limited Class, you can compare the effects of market volatilities on NiSource and MoneyHero Limited 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 MoneyHero Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and MoneyHero Limited.

Diversification Opportunities for NiSource and MoneyHero Limited

0.04

Correlation Coefficient

NiSource  MoneyHero Limited

Significant diversification

The 3 months correlation between NiSource and MoneyHero is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and MoneyHero Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyHero Limited Class 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 MoneyHero Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyHero Limited Class has no effect on the direction of NiSource i.e., NiSource and MoneyHero Limited go up and down completely randomly.

Pair Corralation between NiSource and MoneyHero Limited

Allowing for the 90-day total investment horizon NiSource is expected to generate 0.36 times more return on investment than MoneyHero Limited. However, NiSource is 2.76 times less risky than MoneyHero Limited. It trades about 0.14 of its potential returns per unit of risk. MoneyHero Limited Class is currently generating about 0.02 per unit of risk. If you would invest  3,456  in NiSource on October 25, 2024 and sell it today you would earn a total of  322.00  from holding NiSource or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NiSource  vs.  MoneyHero Limited Class

NiSource

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 10 (%) 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.

MoneyHero Limited Class

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with NiSource and MoneyHero Limited

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

The idea behind NiSource and MoneyHero Limited Class 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.