Correlation Between Morrow Bank and Clean Seas
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Clean Seas 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 Clean Seas 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 Clean Seas Seafood, you can compare the effects of market volatilities on Morrow Bank and Clean Seas 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 Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Clean Seas.
Diversification Opportunities for Morrow Bank and Clean Seas
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morrow and Clean is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood 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 Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Morrow Bank i.e., Morrow Bank and Clean Seas go up and down completely randomly.
Pair Corralation between Morrow Bank and Clean Seas
Assuming the 90 days trading horizon Morrow Bank ASA is expected to generate 0.51 times more return on investment than Clean Seas. However, Morrow Bank ASA is 1.96 times less risky than Clean Seas. It trades about 0.06 of its potential returns per unit of risk. Clean Seas Seafood is currently generating about -0.04 per unit of risk. If you would invest 523.00 in Morrow Bank ASA on September 3, 2024 and sell it today you would earn a total of 331.00 from holding Morrow Bank ASA or generate 63.29% 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. Clean Seas Seafood
Performance |
| Timeline |
| Morrow Bank ASA |
| Clean Seas Seafood |
Morrow Bank and Clean Seas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Clean Seas
The main advantage of trading using opposite Morrow Bank and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.| Morrow Bank vs. Equinor ASA | Morrow Bank vs. DnB ASA | Morrow Bank vs. Aker BP ASA | Morrow Bank vs. Telenor ASA |
| Clean Seas vs. Masoval AS | Clean Seas vs. Andfjord Salmon AS | Clean Seas vs. Arctic Fish Holding | Clean Seas vs. Ice Fish Farm |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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