Correlation Between Grong Sparebank and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and Morrow Bank 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 Grong Sparebank and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Morrow Bank ASA, you can compare the effects of market volatilities on Grong Sparebank and Morrow Bank 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 Grong Sparebank with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Morrow Bank.
Diversification Opportunities for Grong Sparebank and Morrow Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grong and Morrow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and Morrow Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morrow Bank ASA and Grong Sparebank 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 Grong Sparebank are associated (or correlated) with Morrow Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morrow Bank ASA has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and Morrow Bank go up and down completely randomly.
Pair Corralation between Grong Sparebank and Morrow Bank
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 306.47 times less return on investment than Morrow Bank. But when comparing it to its historical volatility, Grong Sparebank is 2.42 times less risky than Morrow Bank. It trades about 0.0 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 666.00 in Morrow Bank ASA on September 1, 2024 and sell it today you would earn a total of 188.00 from holding Morrow Bank ASA or generate 28.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grong Sparebank vs. Morrow Bank ASA
Performance |
| Timeline |
| Grong Sparebank |
| Morrow Bank ASA |
Grong Sparebank and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Morrow Bank
The main advantage of trading using opposite Grong Sparebank and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, Morrow Bank 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 Morrow Bank will offset losses from the drop in Morrow Bank's long position.| Grong Sparebank vs. Odfjell Drilling | Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Norwegian Air Shuttle | Grong Sparebank vs. Dolphin Drilling AS |
| Morrow Bank vs. River Tech plc | Morrow Bank vs. Romerike Sparebank | Morrow Bank vs. Xplora Technologies As | Morrow Bank vs. Kraft Bank Asa |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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