Correlation Between NISOURCE and WPP PLC
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By analyzing existing cross correlation between NISOURCE INC and WPP PLC ADR, you can compare the effects of market volatilities on NISOURCE and WPP PLC 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 WPP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISOURCE and WPP PLC.
Diversification Opportunities for NISOURCE and WPP PLC
Excellent diversification
The 3 months correlation between NISOURCE and WPP is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE INC and WPP PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPP PLC ADR 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 INC are associated (or correlated) with WPP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPP PLC ADR has no effect on the direction of NISOURCE i.e., NISOURCE and WPP PLC go up and down completely randomly.
Pair Corralation between NISOURCE and WPP PLC
Assuming the 90 days trading horizon NISOURCE INC is expected to under-perform the WPP PLC. In addition to that, NISOURCE is 1.53 times more volatile than WPP PLC ADR. It trades about -0.2 of its total potential returns per unit of risk. WPP PLC ADR is currently generating about 0.1 per unit of volatility. If you would invest 5,434 in WPP PLC ADR on September 12, 2024 and sell it today you would earn a total of 146.00 from holding WPP PLC ADR or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
NISOURCE INC vs. WPP PLC ADR
Performance |
| Timeline |
| NISOURCE INC |
| WPP PLC ADR |
NISOURCE and WPP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISOURCE and WPP PLC
The main advantage of trading using opposite NISOURCE and WPP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISOURCE position performs unexpectedly, WPP PLC 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 WPP PLC will offset losses from the drop in WPP PLC's long position.| NISOURCE vs. Freedom Bank of | NISOURCE vs. AmTrust Financial Services | NISOURCE vs. Fast Retailing Co | NISOURCE vs. Artisan Partners Asset |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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