Correlation Between NiSource and Nu Holdings
Can any of the company-specific risk be diversified away by investing in both NiSource and Nu Holdings 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 and Nu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Nu Holdings, you can compare the effects of market volatilities on NiSource and Nu 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 Nu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Nu Holdings.
Diversification Opportunities for NiSource and Nu Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NiSource and Nu Holdings is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Nu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu 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 are associated (or correlated) with Nu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Holdings has no effect on the direction of NiSource i.e., NiSource and Nu Holdings go up and down completely randomly.
Pair Corralation between NiSource and Nu Holdings
Allowing for the 90-day total investment horizon NiSource is expected to generate 1.43 times less return on investment than Nu Holdings. But when comparing it to its historical volatility, NiSource is 2.24 times less risky than Nu Holdings. It trades about 0.24 of its potential returns per unit of risk. Nu Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 988.00 in Nu Holdings on February 10, 2024 and sell it today you would earn a total of 191.00 from holding Nu Holdings or generate 19.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Nu Holdings
Performance |
| Timeline |
| NiSource |
| Nu Holdings |
NiSource and Nu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Nu Holdings
The main advantage of trading using opposite NiSource and Nu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, Nu 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 Nu Holdings will offset losses from the drop in Nu Holdings' long position.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |