Correlation Between NiSource Unit and UGI
Can any of the company-specific risk be diversified away by investing in both NiSource Unit and UGI 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 Unit and UGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource Unit and UGI Corporation, you can compare the effects of market volatilities on NiSource Unit and UGI 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 Unit with a short position of UGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource Unit and UGI.
Diversification Opportunities for NiSource Unit and UGI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NiSource and UGI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NiSource Unit and UGI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corporation and NiSource Unit 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 Unit are associated (or correlated) with UGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corporation has no effect on the direction of NiSource Unit i.e., NiSource Unit and UGI go up and down completely randomly.
Pair Corralation between NiSource Unit and UGI
If you would invest 2,849 in UGI Corporation on November 9, 2024 and sell it today you would earn a total of 352.00 from holding UGI Corporation or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
NiSource Unit vs. UGI Corp.
Performance |
| Timeline |
| NiSource Unit |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| UGI Corporation |
NiSource Unit and UGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource Unit and UGI
The main advantage of trading using opposite NiSource Unit and UGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource Unit position performs unexpectedly, UGI 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 UGI will offset losses from the drop in UGI's long position.The idea behind NiSource Unit and UGI Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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