Correlation Between NISOURCE and MicroCloud Hologram

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

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

Diversification Opportunities for NISOURCE and MicroCloud Hologram

-0.66

Correlation Coefficient

NISOURCE  MicroCloud Hologram

Excellent diversification

The 3 months correlation between NISOURCE and MicroCloud is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE FIN P and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram 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 FIN P are associated (or correlated) with MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of NISOURCE i.e., NISOURCE and MicroCloud Hologram go up and down completely randomly.

Pair Corralation between NISOURCE and MicroCloud Hologram

Assuming the 90 days trading horizon NISOURCE FIN P is expected to under-perform the MicroCloud Hologram. But the bond apears to be less risky and, when comparing its historical volatility, NISOURCE FIN P is 12.99 times less risky than MicroCloud Hologram. The bond trades about -0.05 of its potential returns per unit of risk. The MicroCloud Hologram is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,610  in MicroCloud Hologram on October 7, 2024 and sell it today you would lose (1,156) from holding MicroCloud Hologram or give up 71.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	68.25%
Values	Daily Returns

NISOURCE FIN P  vs.  MicroCloud Hologram

NISOURCE FIN P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISOURCE FIN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for NISOURCE FIN P investors.

MicroCloud Hologram

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MicroCloud Hologram are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, MicroCloud Hologram displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NISOURCE and MicroCloud Hologram

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

The idea behind NISOURCE FIN P and MicroCloud Hologram 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.