Correlation Between NISOURCE and Genfit

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

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

Diversification Opportunities for NISOURCE and Genfit

0.52

Correlation Coefficient

NISOURCE  Genfit

Very weak diversification

The 3 months correlation between NISOURCE and Genfit is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE INC and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 INC are associated (or correlated) with Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of NISOURCE i.e., NISOURCE and Genfit go up and down completely randomly.

Pair Corralation between NISOURCE and Genfit

Assuming the 90 days trading horizon NISOURCE INC is expected to generate 0.36 times more return on investment than Genfit. However, NISOURCE INC is 2.76 times less risky than Genfit. It trades about -0.17 of its potential returns per unit of risk. Genfit is currently generating about -0.27 per unit of risk. If you would invest  9,306  in NISOURCE INC on October 12, 2024 and sell it today you would lose (863.00) from holding NISOURCE INC or give up 9.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.61%
Values	Daily Returns

NISOURCE INC  vs.  Genfit

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 fragile 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.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NISOURCE and Genfit

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

The idea behind NISOURCE INC and Genfit 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.