Correlation Between Morrow Bank and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor ASA, you can compare the effects of market volatilities on Morrow Bank and Nordic Semiconductor 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 Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Nordic Semiconductor.
Diversification Opportunities for Morrow Bank and Nordic Semiconductor
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Morrow and Nordic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor 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 Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of Morrow Bank i.e., Morrow Bank and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Morrow Bank and Nordic Semiconductor
Assuming the 90 days trading horizon Morrow Bank ASA is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Morrow Bank ASA is 1.0 times less risky than Nordic Semiconductor. The stock trades about -0.06 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 10,185 in Nordic Semiconductor ASA on October 25, 2024 and sell it today you would earn a total of 1,815 from holding Nordic Semiconductor ASA or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Morrow Bank ASA |
| Nordic Semiconductor ASA |
Morrow Bank and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Nordic Semiconductor
The main advantage of trading using opposite Morrow Bank and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor'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 |
| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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