Correlation Between Ryman Hospitality and NiSource

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

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

Diversification Opportunities for Ryman Hospitality and NiSource

0.6

Correlation Coefficient

Ryman Hospitality  NiSource

Poor diversification

The 3 months correlation between Ryman and NiSource is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ryman Hospitality Properties and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource and Ryman Hospitality 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 Ryman Hospitality Properties 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 Ryman Hospitality i.e., Ryman Hospitality and NiSource go up and down completely randomly.

Pair Corralation between Ryman Hospitality and NiSource

Considering the 90-day investment horizon Ryman Hospitality Properties is expected to generate 1.34 times more return on investment than NiSource. However, Ryman Hospitality is 1.34 times more volatile than NiSource. It trades about 0.05 of its potential returns per unit of risk. NiSource is currently generating about 0.07 per unit of risk. If you would invest  7,534  in Ryman Hospitality Properties on September 28, 2024 and sell it today you would earn a total of  3,034  from holding Ryman Hospitality Properties or generate 40.26% return on investment over 90 days.

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

Ryman Hospitality Properties  vs.  NiSource

Ryman Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Hospitality Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Ryman Hospitality is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

NiSource

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, NiSource may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ryman Hospitality and NiSource

The main advantage of trading using opposite Ryman Hospitality and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryman Hospitality 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 Ryman Hospitality Properties 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..