Correlation Between Morrow Bank and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Alternus Energy 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 Morrow Bank and Alternus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morrow Bank ASA and Alternus Energy Group, you can compare the effects of market volatilities on Morrow Bank and Alternus Energy 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 Morrow Bank with a short position of Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Alternus Energy.
Diversification Opportunities for Morrow Bank and Alternus Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morrow and Alternus is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and Morrow Bank 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 Morrow Bank ASA are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Morrow Bank i.e., Morrow Bank and Alternus Energy go up and down completely randomly.
Pair Corralation between Morrow Bank and Alternus Energy
Assuming the 90 days trading horizon Morrow Bank is expected to generate 3.96 times less return on investment than Alternus Energy. But when comparing it to its historical volatility, Morrow Bank ASA is 9.77 times less risky than Alternus Energy. It trades about 0.32 of its potential returns per unit of risk. Alternus Energy Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Alternus Energy Group on October 9, 2024 and sell it today you would earn a total of 13.00 from holding Alternus Energy Group or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Alternus Energy Group
Performance |
| Timeline |
| Morrow Bank ASA |
| Alternus Energy Group |
Morrow Bank and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Alternus Energy
The main advantage of trading using opposite Morrow Bank and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy's long position.| Morrow Bank vs. Kraft Bank Asa | Morrow Bank vs. Awilco Drilling PLC | Morrow Bank vs. Nidaros Sparebank | Morrow Bank vs. Vow Green Metals |
| Alternus Energy vs. Cloudberry Clean Energy | Alternus Energy vs. Proximar Seafood AS | Alternus Energy vs. Clean Seas Seafood | Alternus Energy vs. Romerike 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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