Correlation Between NiSource and NESNVX

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

By analyzing existing cross correlation between NiSource and NESNVX 25 14 SEP 41, you can compare the effects of market volatilities on NiSource and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and NESNVX.

Diversification Opportunities for NiSource and NESNVX

0.34

Correlation Coefficient

NiSource  NESNVX

Weak diversification

The 3 months correlation between NiSource and NESNVX is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and NESNVX 25 14 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 25 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 25 14 has no effect on the direction of NiSource i.e., NiSource and NESNVX go up and down completely randomly.

Pair Corralation between NiSource and NESNVX

Allowing for the 90-day total investment horizon NiSource is expected to generate 0.47 times more return on investment than NESNVX. However, NiSource is 2.13 times less risky than NESNVX. It trades about -0.05 of its potential returns per unit of risk. NESNVX 25 14 SEP 41 is currently generating about -0.31 per unit of risk. If you would invest  3,706  in NiSource on October 4, 2024 and sell it today you would lose (30.00) from holding NiSource or give up 0.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	31.82%
Values	Daily Returns

NiSource  vs.  NESNVX 25 14 SEP 41

NiSource

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 8 (%) 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.

NESNVX 25 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 25 14 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NESNVX 25 14 SEP 41 investors.

Pair Trading with NiSource and NESNVX

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

The idea behind NiSource and NESNVX 25 14 SEP 41 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.