Correlation Between Instabank ASA and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Instabank ASA 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 Instabank ASA and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Morrow Bank ASA, you can compare the effects of market volatilities on Instabank ASA 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 Instabank ASA with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Morrow Bank.
Diversification Opportunities for Instabank ASA and Morrow Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Instabank and Morrow is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Instabank 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 Instabank ASA 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 Instabank 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 Instabank ASA i.e., Instabank ASA and Morrow Bank go up and down completely randomly.
Pair Corralation between Instabank ASA and Morrow Bank
Assuming the 90 days trading horizon Instabank ASA is expected to generate 41.38 times less return on investment than Morrow Bank. But when comparing it to its historical volatility, Instabank ASA is 2.18 times less risky than Morrow Bank. It trades about 0.03 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Morrow Bank ASA on September 3, 2024 and sell it today you would earn a total of 194.00 from holding Morrow Bank ASA or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instabank ASA vs. Morrow Bank ASA
Performance |
| Timeline |
| Instabank ASA |
| Morrow Bank ASA |
Instabank ASA and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Morrow Bank
The main advantage of trading using opposite Instabank ASA and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA 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.| Instabank ASA vs. SD Standard Drilling | Instabank ASA vs. Gaming Innovation Group | Instabank ASA vs. Eidesvik Offshore ASA | Instabank ASA vs. Norwegian Air Shuttle |
| Morrow Bank vs. Equinor ASA | Morrow Bank vs. DnB ASA | Morrow Bank vs. Aker BP ASA | Morrow Bank vs. Telenor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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