Correlation Between Grieg Seafood and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Grieg Seafood 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 Grieg Seafood and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grieg Seafood ASA and Morrow Bank ASA, you can compare the effects of market volatilities on Grieg Seafood 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 Grieg Seafood with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grieg Seafood and Morrow Bank.
Diversification Opportunities for Grieg Seafood and Morrow Bank
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grieg and Morrow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Grieg Seafood ASA 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 Grieg Seafood 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 Grieg Seafood ASA 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 Grieg Seafood i.e., Grieg Seafood and Morrow Bank go up and down completely randomly.
Pair Corralation between Grieg Seafood and Morrow Bank
Assuming the 90 days trading horizon Grieg Seafood ASA is expected to generate 0.93 times more return on investment than Morrow Bank. However, Grieg Seafood ASA is 1.07 times less risky than Morrow Bank. It trades about -0.05 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about -0.06 per unit of risk. If you would invest 6,210 in Grieg Seafood ASA on October 25, 2024 and sell it today you would lose (125.00) from holding Grieg Seafood ASA or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grieg Seafood ASA vs. Morrow Bank ASA
Performance |
| Timeline |
| Grieg Seafood ASA |
| Morrow Bank ASA |
Grieg Seafood and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grieg Seafood and Morrow Bank
The main advantage of trading using opposite Grieg Seafood and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grieg Seafood 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.| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi ASA |
| Morrow Bank vs. Kraft Bank Asa | Morrow Bank vs. Dolphin Drilling AS | Morrow Bank vs. Awilco Drilling PLC | Morrow Bank vs. Skue Sparebank |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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