Correlation Between NiSource and IBERIABANK

Can any of the company-specific risk be diversified away by investing in both NiSource and IBERIABANK 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 IBERIABANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NiSource and IBERIABANK, you can compare the effects of market volatilities on NiSource and IBERIABANK 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 IBERIABANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and IBERIABANK.

Diversification Opportunities for NiSource and IBERIABANK

0.0

Correlation Coefficient

NiSource  IBERIABANK

Pay attention - limited upside

The 3 months correlation between NiSource and IBERIABANK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and IBERIABANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBERIABANK 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 IBERIABANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBERIABANK has no effect on the direction of NiSource i.e., NiSource and IBERIABANK go up and down completely randomly.

Pair Corralation between NiSource and IBERIABANK

If you would invest  2,693  in NiSource on February 5, 2024 and sell it today you would earn a total of  161.00  from holding NiSource or generate 5.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NiSource  vs.  IBERIABANK

NiSource

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, NiSource demonstrated solid returns over the last few months and may actually be approaching a breakup point.

IBERIABANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IBERIABANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, IBERIABANK is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NiSource and IBERIABANK

The main advantage of trading using opposite NiSource and IBERIABANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource position performs unexpectedly, IBERIABANK 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 IBERIABANK will offset losses from the drop in IBERIABANK's long position.

The idea behind NiSource and IBERIABANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.