Correlation Between Morrow Bank and Grieg Seafood
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Grieg Seafood 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 Grieg Seafood 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 Grieg Seafood ASA, you can compare the effects of market volatilities on Morrow Bank and Grieg Seafood 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 Grieg Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Grieg Seafood.
Diversification Opportunities for Morrow Bank and Grieg Seafood
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Morrow and Grieg is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Grieg Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood 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 Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood ASA has no effect on the direction of Morrow Bank i.e., Morrow Bank and Grieg Seafood go up and down completely randomly.
Pair Corralation between Morrow Bank and Grieg Seafood
Assuming the 90 days trading horizon Morrow Bank ASA is expected to under-perform the Grieg Seafood. In addition to that, Morrow Bank is 1.07 times more volatile than Grieg Seafood ASA. It trades about -0.06 of its total potential returns per unit of risk. Grieg Seafood ASA is currently generating about -0.05 per unit of volatility. If you would invest 6,210 in Grieg Seafood ASA on October 25, 2024 and sell it today you would lose (125.00) from holding Grieg Seafood ASA or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Grieg Seafood ASA
Performance |
| Timeline |
| Morrow Bank ASA |
| Grieg Seafood ASA |
Morrow Bank and Grieg Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Grieg Seafood
The main advantage of trading using opposite Morrow Bank and Grieg Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Grieg Seafood 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 Grieg Seafood will offset losses from the drop in Grieg Seafood's long position.| Morrow Bank vs. Kraft Bank Asa | Morrow Bank vs. Dolphin Drilling AS | Morrow Bank vs. Awilco Drilling PLC | Morrow Bank vs. Skue Sparebank |
| Grieg Seafood vs. Lery Seafood Group | Grieg Seafood vs. SalMar ASA | Grieg Seafood vs. Austevoll Seafood ASA | Grieg Seafood vs. Mowi 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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