Correlation Between Pinterest and NiSource

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

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

Diversification Opportunities for Pinterest and NiSource

-0.61

Correlation Coefficient

Pinterest  NiSource

Excellent diversification

The 3 months correlation between Pinterest and NiSource is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and NiSource go up and down completely randomly.

Pair Corralation between Pinterest and NiSource

Given the investment horizon of 90 days Pinterest is expected to under-perform the NiSource. In addition to that, Pinterest is 2.63 times more volatile than NiSource. It trades about -0.01 of its total potential returns per unit of risk. NiSource is currently generating about 0.1 per unit of volatility. If you would invest  3,401  in NiSource on September 23, 2024 and sell it today you would earn a total of  216.00  from holding NiSource or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pinterest  vs.  NiSource

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

NiSource

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, NiSource is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pinterest and NiSource

The main advantage of trading using opposite Pinterest and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.

The idea behind Pinterest and NiSource 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.