Correlation Between Morrow Bank and Proximar Seafood
Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Proximar 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 Proximar 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 Proximar Seafood AS, you can compare the effects of market volatilities on Morrow Bank and Proximar 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 Proximar Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Proximar Seafood.
Diversification Opportunities for Morrow Bank and Proximar Seafood
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morrow and Proximar is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar 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 Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Morrow Bank i.e., Morrow Bank and Proximar Seafood go up and down completely randomly.
Pair Corralation between Morrow Bank and Proximar Seafood
Assuming the 90 days trading horizon Morrow Bank ASA is expected to generate 0.95 times more return on investment than Proximar Seafood. However, Morrow Bank ASA is 1.06 times less risky than Proximar Seafood. It trades about 0.57 of its potential returns per unit of risk. Proximar Seafood AS is currently generating about -0.08 per unit of risk. If you would invest 638.00 in Morrow Bank ASA on August 29, 2024 and sell it today you would earn a total of 222.00 from holding Morrow Bank ASA or generate 34.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morrow Bank ASA vs. Proximar Seafood AS
Performance |
| Timeline |
| Morrow Bank ASA |
| Proximar Seafood |
Morrow Bank and Proximar Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morrow Bank and Proximar Seafood
The main advantage of trading using opposite Morrow Bank and Proximar Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Proximar 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 Proximar Seafood will offset losses from the drop in Proximar Seafood's long position.| Morrow Bank vs. Nidaros Sparebank | Morrow Bank vs. SpareBank 1 stlandet | Morrow Bank vs. Bien Sparebank ASA | Morrow Bank vs. Aurskog Sparebank |
| Proximar Seafood vs. Pareto Bank ASA | Proximar Seafood vs. Nordic Technology Group | Proximar Seafood vs. Romerike Sparebank | Proximar Seafood vs. Morrow Bank 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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