Correlation Between Visteon Corp and NiSource
Can any of the company-specific risk be diversified away by investing in both Visteon Corp 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 Visteon Corp and NiSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visteon Corp and NiSource, you can compare the effects of market volatilities on Visteon Corp 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 Visteon Corp with a short position of NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and NiSource.
Diversification Opportunities for Visteon Corp and NiSource
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visteon and NiSource is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource and Visteon Corp 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 Visteon Corp 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 Visteon Corp i.e., Visteon Corp and NiSource go up and down completely randomly.
Pair Corralation between Visteon Corp and NiSource
Allowing for the 90-day total investment horizon Visteon Corp is expected to under-perform the NiSource. In addition to that, Visteon Corp is 1.72 times more volatile than NiSource. It trades about -0.03 of its total potential returns per unit of risk. NiSource is currently generating about 0.07 per unit of volatility. If you would invest 2,597 in NiSource on September 3, 2024 and sell it today you would earn a total of 1,138 from holding NiSource or generate 43.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visteon Corp vs. NiSource
Performance |
| Timeline |
| Visteon Corp |
| NiSource |
Visteon Corp and NiSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visteon Corp and NiSource
The main advantage of trading using opposite Visteon Corp and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp 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.| Visteon Corp vs. Allison Transmission Holdings | Visteon Corp vs. Aptiv PLC | Visteon Corp vs. LKQ Corporation | Visteon Corp vs. Lear Corporation |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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