Correlation Between NiSource and Enagas SA
Can any of the company-specific risk be diversified away by investing in both NiSource and Enagas SA 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 Enagas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Enagas SA, you can compare the effects of market volatilities on NiSource and Enagas SA 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 Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Enagas SA.
Diversification Opportunities for NiSource and Enagas SA
Pay attention - limited upside
The 3 months correlation between NiSource and Enagas is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA 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 Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of NiSource i.e., NiSource and Enagas SA go up and down completely randomly.
Pair Corralation between NiSource and Enagas SA
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.84 times more return on investment than Enagas SA. However, NiSource is 1.19 times less risky than Enagas SA. It trades about 0.07 of its potential returns per unit of risk. Enagas SA is currently generating about 0.0 per unit of risk. If you would invest 2,611 in NiSource on September 2, 2024 and sell it today you would earn a total of 1,198 from holding NiSource or generate 45.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Enagas SA
Performance |
| Timeline |
| NiSource |
| Enagas SA |
NiSource and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Enagas SA
The main advantage of trading using opposite NiSource and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Enagas SA 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 Enagas SA will offset losses from the drop in Enagas SA's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Enagas SA vs. Northwest Natural Gas | Enagas SA vs. Chesapeake Utilities | Enagas SA vs. One Gas | Enagas SA vs. NiSource |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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