Correlation Between NiSource and ENN Energy
Can any of the company-specific risk be diversified away by investing in both NiSource and ENN Energy 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 ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and ENN Energy Holdings, you can compare the effects of market volatilities on NiSource and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and ENN Energy.
Diversification Opportunities for NiSource and ENN Energy
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NiSource and ENN is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of NiSource i.e., NiSource and ENN Energy go up and down completely randomly.
Pair Corralation between NiSource and ENN Energy
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.89 times more return on investment than ENN Energy. However, NiSource is 1.13 times less risky than ENN Energy. It trades about 0.07 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.07 per unit of risk. If you would invest 3,676 in NiSource on November 1, 2024 and sell it today you would earn a total of 76.50 from holding NiSource or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. ENN Energy Holdings
Performance |
| Timeline |
| NiSource |
| ENN Energy Holdings |
NiSource and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and ENN Energy
The main advantage of trading using opposite NiSource and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| ENN Energy vs. Anhui Conch Cement | ENN Energy vs. Sysmex Corp | ENN Energy vs. PICC Property and | ENN Energy vs. Shenzhou International Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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