Correlation Between NiSource and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both NiSource and AMCON Distributing 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 AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and AMCON Distributing, you can compare the effects of market volatilities on NiSource and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and AMCON Distributing.
Diversification Opportunities for NiSource and AMCON Distributing
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NiSource and AMCON is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of NiSource i.e., NiSource and AMCON Distributing go up and down completely randomly.
Pair Corralation between NiSource and AMCON Distributing
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.4 times more return on investment than AMCON Distributing. However, NiSource is 2.52 times less risky than AMCON Distributing. It trades about 0.28 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.13 per unit of risk. If you would invest 3,587 in NiSource on October 20, 2024 and sell it today you would earn a total of 224.00 from holding NiSource or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. AMCON Distributing
Performance |
| Timeline |
| NiSource |
| AMCON Distributing |
NiSource and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and AMCON Distributing
The main advantage of trading using opposite NiSource and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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