Correlation Between NiSource and DIH Holdings
Can any of the company-specific risk be diversified away by investing in both NiSource and DIH Holdings 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 DIH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and DIH Holdings US,, you can compare the effects of market volatilities on NiSource and DIH Holdings 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 DIH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and DIH Holdings.
Diversification Opportunities for NiSource and DIH Holdings
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NiSource and DIH is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of NiSource i.e., NiSource and DIH Holdings go up and down completely randomly.
Pair Corralation between NiSource and DIH Holdings
Allowing for the 90-day total investment horizon NiSource is expected to generate 44.98 times less return on investment than DIH Holdings. But when comparing it to its historical volatility, NiSource is 10.73 times less risky than DIH Holdings. It trades about 0.06 of its potential returns per unit of risk. DIH Holdings US, is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 127.00 in DIH Holdings US, on September 12, 2024 and sell it today you would earn a total of 68.00 from holding DIH Holdings US, or generate 53.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. DIH Holdings US,
Performance |
| Timeline |
| NiSource |
| DIH Holdings US, |
NiSource and DIH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and DIH Holdings
The main advantage of trading using opposite NiSource and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, DIH Holdings 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| DIH Holdings vs. Kaiser Aluminum | DIH Holdings vs. Park Hotels Resorts | DIH Holdings vs. Century Aluminum | DIH Holdings vs. Summit Environmental |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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