Correlation Between Palfinger and NiSource
Can any of the company-specific risk be diversified away by investing in both Palfinger and NiSource 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 Palfinger and NiSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palfinger AG and NiSource, you can compare the effects of market volatilities on Palfinger and NiSource 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 Palfinger with a short position of NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palfinger and NiSource.
Diversification Opportunities for Palfinger and NiSource
Good diversification
The 3 months correlation between Palfinger and NiSource is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Palfinger AG and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource and Palfinger 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 Palfinger AG are associated (or correlated) with NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of Palfinger i.e., Palfinger and NiSource go up and down completely randomly.
Pair Corralation between Palfinger and NiSource
Assuming the 90 days horizon Palfinger AG is expected to under-perform the NiSource. In addition to that, Palfinger is 2.34 times more volatile than NiSource. It trades about -0.22 of its total potential returns per unit of risk. NiSource is currently generating about 0.35 per unit of volatility. 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 |
Palfinger AG vs. NiSource
Performance |
| Timeline |
| Palfinger AG |
| NiSource |
Palfinger and NiSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palfinger and NiSource
The main advantage of trading using opposite Palfinger and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palfinger position performs unexpectedly, NiSource 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 NiSource will offset losses from the drop in NiSource's long position.| Palfinger vs. Volvo AB ADR | Palfinger vs. Deere Company | Palfinger vs. Deutsche Post AG | Palfinger vs. VINCI SA |
| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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