Correlation Between NiSource and Mink Therapeutics
Can any of the company-specific risk be diversified away by investing in both NiSource and Mink Therapeutics 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 Mink Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Mink Therapeutics, you can compare the effects of market volatilities on NiSource and Mink Therapeutics 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 Mink Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Mink Therapeutics.
Diversification Opportunities for NiSource and Mink Therapeutics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NiSource and Mink is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Mink Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mink Therapeutics 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 Mink Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mink Therapeutics has no effect on the direction of NiSource i.e., NiSource and Mink Therapeutics go up and down completely randomly.
Pair Corralation between NiSource and Mink Therapeutics
Allowing for the 90-day total investment horizon NiSource is expected to generate 1.36 times less return on investment than Mink Therapeutics. But when comparing it to its historical volatility, NiSource is 7.79 times less risky than Mink Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Mink Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Mink Therapeutics on November 28, 2024 and sell it today you would lose (29.00) from holding Mink Therapeutics or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Mink Therapeutics
Performance |
| Timeline |
| NiSource |
| Mink Therapeutics |
NiSource and Mink Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Mink Therapeutics
The main advantage of trading using opposite NiSource and Mink Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Mink Therapeutics 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 Mink Therapeutics will offset losses from the drop in Mink Therapeutics' long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Mink Therapeutics vs. Affimed NV | Mink Therapeutics vs. Adaptimmune Therapeutics Plc | Mink Therapeutics vs. Sangamo Therapeutics | Mink Therapeutics vs. Day One Biopharmaceuticals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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