Correlation Between NiSource and Alta Global
Can any of the company-specific risk be diversified away by investing in both NiSource and Alta Global 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 Alta Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Alta Global Group, you can compare the effects of market volatilities on NiSource and Alta Global 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 Alta Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Alta Global.
Diversification Opportunities for NiSource and Alta Global
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NiSource and Alta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of NiSource i.e., NiSource and Alta Global go up and down completely randomly.
Pair Corralation between NiSource and Alta Global
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.16 times more return on investment than Alta Global. However, NiSource is 6.32 times less risky than Alta Global. It trades about 0.1 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.04 per unit of risk. If you would invest 2,516 in NiSource on September 12, 2024 and sell it today you would earn a total of 1,145 from holding NiSource or generate 45.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.08% |
| Values | Daily Returns |
NiSource vs. Alta Global Group
Performance |
| Timeline |
| NiSource |
| Alta Global Group |
NiSource and Alta Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Alta Global
The main advantage of trading using opposite NiSource and Alta Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Alta Global 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 Alta Global will offset losses from the drop in Alta Global's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Alta Global vs. NiSource | Alta Global vs. Vistra Energy Corp | Alta Global vs. Black Hills | Alta Global vs. Sellas Life Sciences |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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