Correlation Between NiSource and Wang Lee

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

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

Diversification Opportunities for NiSource and Wang Lee

0.31

Correlation Coefficient

NiSource  Wang Lee

Weak diversification

The 3 months correlation between NiSource and Wang is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Wang Lee Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wang Lee Group, 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 Wang Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wang Lee Group, has no effect on the direction of NiSource i.e., NiSource and Wang Lee go up and down completely randomly.

Pair Corralation between NiSource and Wang Lee

Allowing for the 90-day total investment horizon NiSource is expected to generate 0.07 times more return on investment than Wang Lee. However, NiSource is 14.18 times less risky than Wang Lee. It trades about 0.12 of its potential returns per unit of risk. Wang Lee Group, is currently generating about -0.01 per unit of risk. If you would invest  3,642  in NiSource on December 28, 2024 and sell it today you would earn a total of  333.00  from holding NiSource or generate 9.14% return on investment over 90 days.

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

NiSource  vs.  Wang Lee Group,

NiSource

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 9 (%) 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 April 2025.

Wang Lee Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wang Lee Group, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with NiSource and Wang Lee

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

The idea behind NiSource and Wang Lee Group, 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.