Correlation Between Norbit ASA and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Norbit ASA 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 Norbit ASA and Morrow Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norbit ASA and Morrow Bank ASA, you can compare the effects of market volatilities on Norbit ASA 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 Norbit ASA with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norbit ASA and Morrow Bank.
Diversification Opportunities for Norbit ASA and Morrow Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Norbit and Morrow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Norbit 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 Norbit ASA 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 Norbit 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 Norbit ASA i.e., Norbit ASA and Morrow Bank go up and down completely randomly.
Pair Corralation between Norbit ASA and Morrow Bank
Assuming the 90 days trading horizon Norbit ASA is expected to generate 16.37 times less return on investment than Morrow Bank. But when comparing it to its historical volatility, Norbit ASA is 1.35 times less risky than Morrow Bank. It trades about 0.04 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Morrow Bank ASA on September 5, 2024 and sell it today you would earn a total of 192.00 from holding Morrow Bank ASA or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norbit ASA vs. Morrow Bank ASA
Performance |
| Timeline |
| Norbit ASA |
| Morrow Bank ASA |
Norbit ASA and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norbit ASA and Morrow Bank
The main advantage of trading using opposite Norbit ASA and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norbit ASA 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.| Norbit ASA vs. Morrow Bank ASA | Norbit ASA vs. Jaeren Sparebank | Norbit ASA vs. Nordic Technology Group | Norbit ASA vs. Nordic Mining ASA |
| Morrow Bank vs. Equinor ASA | Morrow Bank vs. DnB ASA | Morrow Bank vs. Aker BP ASA | Morrow Bank vs. Telenor 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |