Correlation Between NiSource and GE Vernova
Can any of the company-specific risk be diversified away by investing in both NiSource and GE Vernova 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 GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and GE Vernova LLC, you can compare the effects of market volatilities on NiSource and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and GE Vernova.
Diversification Opportunities for NiSource and GE Vernova
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NiSource and GEV is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of NiSource i.e., NiSource and GE Vernova go up and down completely randomly.
Pair Corralation between NiSource and GE Vernova
Allowing for the 90-day total investment horizon NiSource is expected to generate 16.92 times less return on investment than GE Vernova. But when comparing it to its historical volatility, NiSource is 3.64 times less risky than GE Vernova. It trades about 0.02 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 33,167 in GE Vernova LLC on November 3, 2024 and sell it today you would earn a total of 4,121 from holding GE Vernova LLC or generate 12.43% 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. GE Vernova LLC
Performance |
| Timeline |
| NiSource |
| GE Vernova LLC |
NiSource and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and GE Vernova
The main advantage of trading using opposite NiSource and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| GE Vernova vs. Franklin Street Properties | GE Vernova vs. Taylor Morn Home | GE Vernova vs. Mid Atlantic Home Health | GE Vernova vs. Custom Truck One |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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