Correlation Between NiSource and Chimerix
Can any of the company-specific risk be diversified away by investing in both NiSource and Chimerix 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 Chimerix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Chimerix, you can compare the effects of market volatilities on NiSource and Chimerix 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 Chimerix. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Chimerix.
Diversification Opportunities for NiSource and Chimerix
Weak diversification
The 3 months correlation between NiSource and Chimerix is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Chimerix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chimerix 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 Chimerix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chimerix has no effect on the direction of NiSource i.e., NiSource and Chimerix go up and down completely randomly.
Pair Corralation between NiSource and Chimerix
Allowing for the 90-day total investment horizon NiSource is expected to generate 1.66 times less return on investment than Chimerix. But when comparing it to its historical volatility, NiSource is 4.19 times less risky than Chimerix. It trades about 0.48 of its potential returns per unit of risk. Chimerix is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Chimerix on November 28, 2024 and sell it today you would earn a total of 64.00 from holding Chimerix or generate 15.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Chimerix
Performance |
| Timeline |
| NiSource |
| Chimerix |
NiSource and Chimerix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Chimerix
The main advantage of trading using opposite NiSource and Chimerix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Chimerix 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 Chimerix will offset losses from the drop in Chimerix's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Chimerix vs. Assembly Biosciences | Chimerix vs. Spero Therapeutics | Chimerix vs. Achilles Therapeutics PLC | Chimerix vs. Instil Bio |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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