Correlation Between Dow Jones and NISOURCE
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By analyzing existing cross correlation between Dow Jones Industrial and NISOURCE FIN P, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NISOURCE.
Diversification Opportunities for Dow Jones and NISOURCE
Modest diversification
The 3 months correlation between Dow and NISOURCE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P and Dow Jones 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 Dow Jones Industrial 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 FIN P has no effect on the direction of Dow Jones i.e., Dow Jones and NISOURCE go up and down completely randomly.
Pair Corralation between Dow Jones and NISOURCE
Assuming the 90 days trading horizon Dow Jones is expected to generate 42.7 times less return on investment than NISOURCE. But when comparing it to its historical volatility, Dow Jones Industrial is 73.28 times less risky than NISOURCE. It trades about 0.08 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,291 in NISOURCE FIN P on September 3, 2024 and sell it today you would lose (474.00) from holding NISOURCE FIN P or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.13% |
| Values | Daily Returns |
Dow Jones Industrial vs. NISOURCE FIN P
Performance |
| Timeline |
Dow Jones and NISOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NISOURCE FIN P
Pair trading matchups for NISOURCE
Pair Trading with Dow Jones and NISOURCE
The main advantage of trading using opposite Dow Jones and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| NISOURCE vs. Shoe Carnival | NISOURCE vs. American Eagle Outfitters | NISOURCE vs. Mattel Inc | NISOURCE vs. Burlington Stores |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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