Correlation Between NISOURCE and Dow Jones
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By analyzing existing cross correlation between NISOURCE FIN P and Dow Jones Industrial, you can compare the effects of market volatilities on NISOURCE and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISOURCE and Dow Jones.
Diversification Opportunities for NISOURCE and Dow Jones
Good diversification
The 3 months correlation between NISOURCE and Dow is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE FIN P and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of NISOURCE i.e., NISOURCE and Dow Jones go up and down completely randomly.
Pair Corralation between NISOURCE and Dow Jones
Assuming the 90 days trading horizon NISOURCE FIN P is expected to generate 65.9 times more return on investment than Dow Jones. However, NISOURCE is 65.9 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 8,488 in NISOURCE FIN P on September 23, 2024 and sell it today you would earn a total of 135.00 from holding NISOURCE FIN P or generate 1.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 91.15% |
Values | Daily Returns |
NISOURCE FIN P vs. Dow Jones Industrial
Performance |
Timeline |
NISOURCE and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
NISOURCE FIN P
Pair trading matchups for NISOURCE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NISOURCE and Dow Jones
The main advantage of trading using opposite NISOURCE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISOURCE position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.NISOURCE vs. United Guardian | NISOURCE vs. Church Dwight | NISOURCE vs. Coty Inc | NISOURCE vs. Estee Lauder Companies |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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