Correlation Between Osaka Steel and NISOURCE

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

By analyzing existing cross correlation between Osaka Steel Co, and NISOURCE INC, you can compare the effects of market volatilities on Osaka Steel 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 Osaka Steel with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osaka Steel and NISOURCE.

Diversification Opportunities for Osaka Steel and NISOURCE

-0.31

Correlation Coefficient

Osaka Steel  NISOURCE

Very good diversification

The 3 months correlation between Osaka and NISOURCE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Osaka Steel Co, and NISOURCE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE INC and Osaka Steel 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 Osaka Steel Co, 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 INC has no effect on the direction of Osaka Steel i.e., Osaka Steel and NISOURCE go up and down completely randomly.

Pair Corralation between Osaka Steel and NISOURCE

If you would invest  1,020  in Osaka Steel Co, on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Osaka Steel Co, or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.54%
Values	Daily Returns

Osaka Steel Co,  vs.  NISOURCE INC

Osaka Steel Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osaka Steel Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Osaka Steel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

NISOURCE INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISOURCE INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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 NISOURCE INC investors.

Pair Trading with Osaka Steel and NISOURCE

The main advantage of trading using opposite Osaka Steel and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osaka Steel 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 Osaka Steel Co, and NISOURCE INC 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.