Correlation Between NiSource and Entergy Mississippi
Can any of the company-specific risk be diversified away by investing in both NiSource and Entergy Mississippi 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 Entergy Mississippi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Entergy Mississippi LLC, you can compare the effects of market volatilities on NiSource and Entergy Mississippi 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 Entergy Mississippi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Entergy Mississippi.
Diversification Opportunities for NiSource and Entergy Mississippi
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NiSource and Entergy is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Entergy Mississippi LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Mississippi LLC 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 Entergy Mississippi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Mississippi LLC has no effect on the direction of NiSource i.e., NiSource and Entergy Mississippi go up and down completely randomly.
Pair Corralation between NiSource and Entergy Mississippi
Allowing for the 90-day total investment horizon NiSource is expected to generate 1.31 times more return on investment than Entergy Mississippi. However, NiSource is 1.31 times more volatile than Entergy Mississippi LLC. It trades about 0.07 of its potential returns per unit of risk. Entergy Mississippi LLC is currently generating about 0.03 per unit of risk. If you would invest 2,558 in NiSource on August 24, 2024 and sell it today you would earn a total of 1,213 from holding NiSource or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Entergy Mississippi LLC
Performance |
| Timeline |
| NiSource |
| Entergy Mississippi LLC |
NiSource and Entergy Mississippi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Entergy Mississippi
The main advantage of trading using opposite NiSource and Entergy Mississippi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Entergy Mississippi 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 Entergy Mississippi will offset losses from the drop in Entergy Mississippi's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Entergy Mississippi vs. Entergy Arkansas LLC | Entergy Mississippi vs. Entergy New Orleans | Entergy Mississippi vs. Entergy Louisiana LLC | Entergy Mississippi vs. Entergy New Orleans |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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