Correlation Between NiSource and Hong Kong
Can any of the company-specific risk be diversified away by investing in both NiSource and Hong Kong 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 Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Hong Kong and, you can compare the effects of market volatilities on NiSource and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Hong Kong.
Diversification Opportunities for NiSource and Hong Kong
Good diversification
The 3 months correlation between NiSource and Hong is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Hong Kong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong has no effect on the direction of NiSource i.e., NiSource and Hong Kong go up and down completely randomly.
Pair Corralation between NiSource and Hong Kong
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.34 times more return on investment than Hong Kong. However, NiSource is 2.94 times less risky than Hong Kong. It trades about 0.07 of its potential returns per unit of risk. Hong Kong and is currently generating about 0.01 per unit of risk. If you would invest 2,547 in NiSource on November 2, 2024 and sell it today you would earn a total of 1,210 from holding NiSource or generate 47.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Hong Kong and
Performance |
| Timeline |
| NiSource |
| Hong Kong |
NiSource and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Hong Kong
The main advantage of trading using opposite NiSource and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Hong Kong vs. Henderson Land Development | Hong Kong vs. CLP Holdings | Hong Kong vs. Power Assets Holdings | Hong Kong vs. Hang Lung Properties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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