Correlation Between NiSource and Ayala
Can any of the company-specific risk be diversified away by investing in both NiSource and Ayala 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 Ayala into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Ayala, you can compare the effects of market volatilities on NiSource and Ayala 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 Ayala. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Ayala.
Diversification Opportunities for NiSource and Ayala
Very weak diversification
The 3 months correlation between NiSource and Ayala is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Ayala in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala 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 are associated (or correlated) with Ayala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala has no effect on the direction of NiSource i.e., NiSource and Ayala go up and down completely randomly.
Pair Corralation between NiSource and Ayala
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.61 times more return on investment than Ayala. However, NiSource is 1.63 times less risky than Ayala. It trades about 0.15 of its potential returns per unit of risk. Ayala is currently generating about -0.03 per unit of risk. If you would invest 2,561 in NiSource on September 14, 2024 and sell it today you would earn a total of 1,117 from holding NiSource or generate 43.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.98% |
| Values | Daily Returns |
NiSource vs. Ayala
Performance |
| Timeline |
| NiSource |
| Ayala |
NiSource and Ayala Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Ayala
The main advantage of trading using opposite NiSource and Ayala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Ayala 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 Ayala will offset losses from the drop in Ayala's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Ayala vs. Tianjin Capital Environmental | Ayala vs. Kulicke and Soffa | Ayala vs. Plexus Corp | Ayala vs. United States Steel |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stocks Directory Find actively traded stocks across global markets |