Correlation Between NiSource and Palfinger
Can any of the company-specific risk be diversified away by investing in both NiSource and Palfinger 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 Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Palfinger AG, you can compare the effects of market volatilities on NiSource and Palfinger 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 Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Palfinger.
Diversification Opportunities for NiSource and Palfinger
Good diversification
The 3 months correlation between NiSource and Palfinger is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG 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 Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of NiSource i.e., NiSource and Palfinger go up and down completely randomly.
Pair Corralation between NiSource and Palfinger
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.43 times more return on investment than Palfinger. However, NiSource is 2.34 times less risky than Palfinger. It trades about 0.35 of its potential returns per unit of risk. Palfinger AG is currently generating about -0.22 per unit of risk. If you would invest 3,474 in NiSource on September 4, 2024 and sell it today you would earn a total of 261.00 from holding NiSource or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Palfinger AG
Performance |
| Timeline |
| NiSource |
| Palfinger AG |
NiSource and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Palfinger
The main advantage of trading using opposite NiSource and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Palfinger vs. Volvo AB ADR | Palfinger vs. Deere Company | Palfinger vs. Deutsche Post AG | Palfinger vs. VINCI SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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