Correlation Between Morrow Bank and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Nordic Mining 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 Mining 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 Mining ASA, you can compare the effects of market volatilities on Morrow Bank and Nordic Mining 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 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Nordic Mining.
Diversification Opportunities for Morrow Bank and Nordic Mining
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morrow and Nordic is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining 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 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Morrow Bank i.e., Morrow Bank and Nordic Mining go up and down completely randomly.
Pair Corralation between Morrow Bank and Nordic Mining
Assuming the 90 days trading horizon Morrow Bank ASA is expected to generate 1.04 times more return on investment than Nordic Mining. However, Morrow Bank is 1.04 times more volatile than Nordic Mining ASA. It trades about -0.04 of its potential returns per unit of risk. Nordic Mining ASA is currently generating about -0.58 per unit of risk. If you would invest 920.00 in Morrow Bank ASA on October 24, 2024 and sell it today you would lose (16.00) from holding Morrow Bank ASA or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Nordic Mining ASA
Performance |
| Timeline |
| Morrow Bank ASA |
| Nordic Mining ASA |
Morrow Bank and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Nordic Mining
The main advantage of trading using opposite Morrow Bank and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Nordic Mining 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 Mining will offset losses from the drop in Nordic Mining's long position.| Morrow Bank vs. SpareBank 1 stlandet | Morrow Bank vs. SD Standard Drilling | Morrow Bank vs. Clean Seas Seafood | Morrow Bank vs. Nidaros Sparebank |
| Nordic Mining vs. Austevoll Seafood ASA | Nordic Mining vs. Melhus Sparebank | Nordic Mining vs. Cloudberry Clean Energy | Nordic Mining vs. NorAm Drilling AS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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