Correlation Between Hawaiian Electric and NiSource
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric 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 Hawaiian Electric and NiSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and NiSource, you can compare the effects of market volatilities on Hawaiian Electric 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 Hawaiian Electric with a short position of NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and NiSource.
Diversification Opportunities for Hawaiian Electric and NiSource
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and NiSource is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource and Hawaiian Electric 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 Hawaiian Electric Industries 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 has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and NiSource go up and down completely randomly.
Pair Corralation between Hawaiian Electric and NiSource
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 2.01 times more return on investment than NiSource. However, Hawaiian Electric is 2.01 times more volatile than NiSource. It trades about 0.18 of its potential returns per unit of risk. NiSource is currently generating about 0.35 per unit of risk. If you would invest 975.00 in Hawaiian Electric Industries on August 26, 2024 and sell it today you would earn a total of 86.00 from holding Hawaiian Electric Industries or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. NiSource
Performance |
| Timeline |
| Hawaiian Electric |
| NiSource |
Hawaiian Electric and NiSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and NiSource
The main advantage of trading using opposite Hawaiian Electric and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric 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.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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