Correlation Between NISOURCE and Herc Holdings
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By analyzing existing cross correlation between NISOURCE FIN P and Herc Holdings, you can compare the effects of market volatilities on NISOURCE and Herc Holdings 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 Herc Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISOURCE and Herc Holdings.
Diversification Opportunities for NISOURCE and Herc Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NISOURCE and Herc is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NISOURCE FIN P and Herc Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herc 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 FIN P are associated (or correlated) with Herc Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herc Holdings has no effect on the direction of NISOURCE i.e., NISOURCE and Herc Holdings go up and down completely randomly.
Pair Corralation between NISOURCE and Herc Holdings
Assuming the 90 days trading horizon NISOURCE FIN P is expected to under-perform the Herc Holdings. But the bond apears to be less risky and, when comparing its historical volatility, NISOURCE FIN P is 2.11 times less risky than Herc Holdings. The bond trades about -0.23 of its potential returns per unit of risk. The Herc Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 20,914 in Herc Holdings on September 1, 2024 and sell it today you would earn a total of 2,286 from holding Herc Holdings or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
NISOURCE FIN P vs. Herc Holdings
Performance |
| Timeline |
| NISOURCE FIN P |
| Herc Holdings |
NISOURCE and Herc Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISOURCE and Herc Holdings
The main advantage of trading using opposite NISOURCE and Herc Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISOURCE position performs unexpectedly, Herc Holdings 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 Herc Holdings will offset losses from the drop in Herc Holdings' long position.| NISOURCE vs. Herc Holdings | NISOURCE vs. United States Steel | NISOURCE vs. Hertz Global Holdings | NISOURCE vs. Insteel Industries |
| Herc Holdings vs. McGrath RentCorp | Herc Holdings vs. Alta Equipment Group | Herc Holdings vs. Custom Truck One | Herc Holdings vs. GATX Corporation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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