Correlation Between Tesla and NISOURCE
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By analyzing existing cross correlation between Tesla Inc and NISOURCE INC, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and NISOURCE.
Diversification Opportunities for Tesla and NISOURCE
Poor diversification
The 3 months correlation between Tesla and NISOURCE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and NISOURCE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE INC and Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and NISOURCE go up and down completely randomly.
Pair Corralation between Tesla and NISOURCE
Given the investment horizon of 90 days Tesla Inc is expected to generate 10.88 times more return on investment than NISOURCE. However, Tesla is 10.88 times more volatile than NISOURCE INC. It trades about 0.2 of its potential returns per unit of risk. NISOURCE INC is currently generating about -0.02 per unit of risk. If you would invest 26,251 in Tesla Inc on October 26, 2024 and sell it today you would earn a total of 14,987 from holding Tesla Inc or generate 57.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tesla Inc vs. NISOURCE INC
Performance |
Timeline |
Tesla Inc |
NISOURCE INC |
Tesla and NISOURCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tesla and NISOURCE
The main advantage of trading using opposite Tesla and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla Inc 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.NISOURCE vs. National CineMedia | NISOURCE vs. Amgen Inc | NISOURCE vs. Merit Medical Systems | NISOURCE vs. Sonida Senior Living |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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