Correlation Between Morrow Bank and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Bien Sparebank 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 Bien Sparebank 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 Bien Sparebank ASA, you can compare the effects of market volatilities on Morrow Bank and Bien Sparebank 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 Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Bien Sparebank.
Diversification Opportunities for Morrow Bank and Bien Sparebank
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Morrow and Bien is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank ASA 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 Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Morrow Bank i.e., Morrow Bank and Bien Sparebank go up and down completely randomly.
Pair Corralation between Morrow Bank and Bien Sparebank
Assuming the 90 days trading horizon Morrow Bank ASA is expected to generate 1.36 times more return on investment than Bien Sparebank. However, Morrow Bank is 1.36 times more volatile than Bien Sparebank ASA. It trades about 0.47 of its potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.33 per unit of risk. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Bien Sparebank ASA
Performance |
| Timeline |
| Morrow Bank ASA |
| Bien Sparebank ASA |
Morrow Bank and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Bien Sparebank
The main advantage of trading using opposite Morrow Bank and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Bien Sparebank 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Morrow Bank vs. River Tech plc | Morrow Bank vs. Romerike Sparebank | Morrow Bank vs. Xplora Technologies As | Morrow Bank vs. Kraft Bank Asa |
| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Romerike Sparebank | Bien Sparebank vs. Elkem ASA | Bien Sparebank vs. Integrated Wind Solutions |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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