Correlation Between NiSource and Wang Lee
Can any of the company-specific risk be diversified away by investing in both NiSource and Wang Lee 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 Wang Lee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Wang Lee Group,, you can compare the effects of market volatilities on NiSource and Wang Lee 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 Wang Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Wang Lee.
Diversification Opportunities for NiSource and Wang Lee
Poor diversification
The 3 months correlation between NiSource and Wang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Wang Lee Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wang Lee 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 Wang Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wang Lee Group, has no effect on the direction of NiSource i.e., NiSource and Wang Lee go up and down completely randomly.
Pair Corralation between NiSource and Wang Lee
Allowing for the 90-day total investment horizon NiSource is expected to generate 7.53 times less return on investment than Wang Lee. But when comparing it to its historical volatility, NiSource is 9.94 times less risky than Wang Lee. It trades about 0.08 of its potential returns per unit of risk. Wang Lee Group, is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Wang Lee Group, on November 28, 2024 and sell it today you would earn a total of 271.00 from holding Wang Lee Group, or generate 87.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
NiSource vs. Wang Lee Group,
Performance |
| Timeline |
| NiSource |
| Wang Lee Group, |
NiSource and Wang Lee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Wang Lee
The main advantage of trading using opposite NiSource and Wang Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Wang Lee 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 Wang Lee will offset losses from the drop in Wang Lee's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Wang Lee vs. JD Sports Fashion | Wang Lee vs. Canlan Ice Sports | Wang Lee vs. Integrated Media Technology | Wang Lee vs. Sonos Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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