Correlation Between FactSet Research and NISOURCE

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Can any of the company-specific risk be diversified away by investing in both FactSet Research and NISOURCE 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 FactSet Research and NISOURCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FactSet Research Systems and NISOURCE INC, you can compare the effects of market volatilities on FactSet Research 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 FactSet Research with a short position of NISOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and NISOURCE.

Diversification Opportunities for FactSet Research and NISOURCE

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between FactSet and NISOURCE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and NISOURCE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE INC and FactSet Research 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 FactSet Research Systems 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 INC has no effect on the direction of FactSet Research i.e., FactSet Research and NISOURCE go up and down completely randomly.

Pair Corralation between FactSet Research and NISOURCE

Considering the 90-day investment horizon FactSet Research Systems is expected to generate 1.41 times more return on investment than NISOURCE. However, FactSet Research is 1.41 times more volatile than NISOURCE INC. It trades about 0.02 of its potential returns per unit of risk. NISOURCE INC is currently generating about -0.01 per unit of risk. If you would invest  44,864  in FactSet Research Systems on September 3, 2024 and sell it today you would earn a total of  4,203  from holding FactSet Research Systems or generate 9.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy82.63%
ValuesDaily Returns

FactSet Research Systems  vs.  NISOURCE INC

 Performance 
       Timeline  
FactSet Research Systems 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, FactSet Research unveiled solid returns over the last few months and may actually be approaching a breakup point.
NISOURCE INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 inconsistent 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.

FactSet Research and NISOURCE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FactSet Research and NISOURCE

The main advantage of trading using opposite FactSet Research and NISOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research 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.
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The idea behind FactSet Research Systems and NISOURCE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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