Correlation Between Nidaros Sparebank and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Nidaros Sparebank and Morrow Bank 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 Nidaros Sparebank and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidaros Sparebank and Morrow Bank ASA, you can compare the effects of market volatilities on Nidaros Sparebank and Morrow Bank 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 Nidaros Sparebank with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidaros Sparebank and Morrow Bank.
Diversification Opportunities for Nidaros Sparebank and Morrow Bank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nidaros and Morrow is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nidaros Sparebank and Morrow Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morrow Bank ASA and Nidaros Sparebank 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 Nidaros Sparebank are associated (or correlated) with Morrow Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morrow Bank ASA has no effect on the direction of Nidaros Sparebank i.e., Nidaros Sparebank and Morrow Bank go up and down completely randomly.
Pair Corralation between Nidaros Sparebank and Morrow Bank
Assuming the 90 days trading horizon Nidaros Sparebank is expected to generate 0.89 times more return on investment than Morrow Bank. However, Nidaros Sparebank is 1.13 times less risky than Morrow Bank. It trades about 0.08 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about 0.07 per unit of risk. If you would invest 10,100 in Nidaros Sparebank on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Nidaros Sparebank or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nidaros Sparebank vs. Morrow Bank ASA
Performance |
| Timeline |
| Nidaros Sparebank |
| Morrow Bank ASA |
Nidaros Sparebank and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidaros Sparebank and Morrow Bank
The main advantage of trading using opposite Nidaros Sparebank and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidaros Sparebank position performs unexpectedly, Morrow Bank 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 Morrow Bank will offset losses from the drop in Morrow Bank's long position.| Nidaros Sparebank vs. Helgeland Sparebank | Nidaros Sparebank vs. Arcticzymes Technologies ASA | Nidaros Sparebank vs. Sparebanken Ost | Nidaros Sparebank vs. Cloudberry Clean Energy |
| Morrow Bank vs. Aurskog Sparebank | Morrow Bank vs. Grong Sparebank | Morrow Bank vs. Romsdal Sparebank | Morrow Bank vs. SD Standard Drilling |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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