Correlation Between NISOURCE and Zenvia

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

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

Diversification Opportunities for NISOURCE and Zenvia

-0.79

Correlation Coefficient

NISOURCE  Zenvia

Pay attention - limited upside

The 3 months correlation between NISOURCE and Zenvia is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE INC and Zenvia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenvia Inc 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 Zenvia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenvia Inc has no effect on the direction of NISOURCE i.e., NISOURCE and Zenvia go up and down completely randomly.

Pair Corralation between NISOURCE and Zenvia

Assuming the 90 days trading horizon NISOURCE INC is expected to under-perform the Zenvia. But the bond apears to be less risky and, when comparing its historical volatility, NISOURCE INC is 5.22 times less risky than Zenvia. The bond trades about -0.27 of its potential returns per unit of risk. The Zenvia Inc is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  167.00  in Zenvia Inc on October 12, 2024 and sell it today you would earn a total of  92.00  from holding Zenvia Inc or generate 55.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

NISOURCE INC  vs.  Zenvia Inc

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.

Zenvia Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zenvia Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Zenvia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NISOURCE and Zenvia

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

The idea behind NISOURCE INC and Zenvia 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.