Correlation Between NiSource Unit and Chesapeake Utilities

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

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

Diversification Opportunities for NiSource Unit and Chesapeake Utilities

0.0

Correlation Coefficient

NiSource Unit  Chesapeake Utilities

Pay attention - limited upside

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

Pair Corralation between NiSource Unit and Chesapeake Utilities

If you would invest (100.00) in NiSource Unit on May 5, 2025 and sell it today you would earn a total of  100.00  from holding NiSource Unit or generate -100.0% return on investment over 90 days.

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

NiSource Unit  vs.  Chesapeake Utilities

NiSource Unit

Risk-Adjusted Performance

Very Weak

Over the last 90 days NiSource Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, NiSource Unit is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with NiSource Unit and Chesapeake Utilities

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

The idea behind NiSource Unit and Chesapeake Utilities 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.