Correlation Between NiSource and Summit Midstream
Can any of the company-specific risk be diversified away by investing in both NiSource and Summit Midstream 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 Summit Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Summit Midstream, you can compare the effects of market volatilities on NiSource and Summit Midstream 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 Summit Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Summit Midstream.
Diversification Opportunities for NiSource and Summit Midstream
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NiSource and Summit is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Summit Midstream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Midstream 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 Summit Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Midstream has no effect on the direction of NiSource i.e., NiSource and Summit Midstream go up and down completely randomly.
Pair Corralation between NiSource and Summit Midstream
Allowing for the 90-day total investment horizon NiSource is expected to generate 2.76 times less return on investment than Summit Midstream. But when comparing it to its historical volatility, NiSource is 1.65 times less risky than Summit Midstream. It trades about 0.12 of its potential returns per unit of risk. Summit Midstream is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Summit Midstream on October 26, 2024 and sell it today you would earn a total of 811.00 from holding Summit Midstream or generate 23.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Summit Midstream
Performance |
| Timeline |
| NiSource |
| Summit Midstream |
NiSource and Summit Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Summit Midstream
The main advantage of trading using opposite NiSource and Summit Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Summit Midstream 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 Summit Midstream will offset losses from the drop in Summit Midstream's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Summit Midstream vs. Griffon | Summit Midstream vs. Vasta Platform | Summit Midstream vs. Tritent International Agriculture | Summit Midstream vs. Jacobs Solutions |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |