Correlation Between Nordic Mining and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Nordic Mining 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 Nordic Mining and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Mining ASA and Morrow Bank ASA, you can compare the effects of market volatilities on Nordic Mining 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 Nordic Mining with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Mining and Morrow Bank.
Diversification Opportunities for Nordic Mining and Morrow Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Morrow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Mining ASA 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 Nordic Mining 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 Nordic Mining ASA 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 Nordic Mining i.e., Nordic Mining and Morrow Bank go up and down completely randomly.
Pair Corralation between Nordic Mining and Morrow Bank
Assuming the 90 days trading horizon Nordic Mining ASA is expected to under-perform the Morrow Bank. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Mining ASA is 1.04 times less risky than Morrow Bank. The stock trades about -0.67 of its potential returns per unit of risk. The Morrow Bank ASA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 930.00 in Morrow Bank ASA on October 25, 2024 and sell it today you would lose (24.00) from holding Morrow Bank ASA or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Mining ASA vs. Morrow Bank ASA
Performance |
| Timeline |
| Nordic Mining ASA |
| Morrow Bank ASA |
Nordic Mining and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Mining and Morrow Bank
The main advantage of trading using opposite Nordic Mining and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Mining 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.| Nordic Mining vs. Clean Seas Seafood | Nordic Mining vs. BW Offshore | Nordic Mining vs. Instabank ASA | Nordic Mining vs. Jaeren Sparebank |
| Morrow Bank vs. Kraft Bank Asa | Morrow Bank vs. Dolphin Drilling AS | Morrow Bank vs. Awilco Drilling PLC | Morrow Bank vs. Skue Sparebank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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