Correlation Between Morrow Bank and Bergen Carbon
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Bergen Carbon 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 Bergen Carbon 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 Bergen Carbon Solutions, you can compare the effects of market volatilities on Morrow Bank and Bergen Carbon 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 Bergen Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Bergen Carbon.
Diversification Opportunities for Morrow Bank and Bergen Carbon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morrow and Bergen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Bergen Carbon Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergen Carbon Solutions 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 Bergen Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergen Carbon Solutions has no effect on the direction of Morrow Bank i.e., Morrow Bank and Bergen Carbon go up and down completely randomly.
Pair Corralation between Morrow Bank and Bergen Carbon
Assuming the 90 days trading horizon Morrow Bank ASA is expected to under-perform the Bergen Carbon. But the stock apears to be less risky and, when comparing its historical volatility, Morrow Bank ASA is 3.13 times less risky than Bergen Carbon. The stock trades about -0.08 of its potential returns per unit of risk. The Bergen Carbon Solutions is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Bergen Carbon Solutions on November 27, 2024 and sell it today you would earn a total of 30.00 from holding Bergen Carbon Solutions or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Bergen Carbon Solutions
Performance |
| Timeline |
| Morrow Bank ASA |
| Bergen Carbon Solutions |
Morrow Bank and Bergen Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Bergen Carbon
The main advantage of trading using opposite Morrow Bank and Bergen Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Bergen Carbon 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 Bergen Carbon will offset losses from the drop in Bergen Carbon's long position.| Morrow Bank vs. Romsdal Sparebank | Morrow Bank vs. Melhus Sparebank | Morrow Bank vs. Nordhealth AS | Morrow Bank vs. Pareto Bank ASA |
| Bergen Carbon vs. Pareto Bank ASA | Bergen Carbon vs. Bien Sparebank ASA | Bergen Carbon vs. Jaeren Sparebank | Bergen Carbon vs. Eidesvik Offshore 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |