Correlation Between Telenor ASA and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Telenor 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 Telenor 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 Telenor ASA and Morrow Bank ASA, you can compare the effects of market volatilities on Telenor 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 Telenor ASA with a short position of Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Morrow Bank.
Diversification Opportunities for Telenor ASA and Morrow Bank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telenor and Morrow is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Telenor 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 Telenor 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 Telenor 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 Telenor ASA i.e., Telenor ASA and Morrow Bank go up and down completely randomly.
Pair Corralation between Telenor ASA and Morrow Bank
Assuming the 90 days trading horizon Telenor ASA is expected to under-perform the Morrow Bank. But the stock apears to be less risky and, when comparing its historical volatility, Telenor ASA is 1.47 times less risky than Morrow Bank. The stock trades about -0.02 of its potential returns per unit of risk. The Morrow Bank ASA is currently generating about 0.59 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telenor ASA vs. Morrow Bank ASA
Performance |
| Timeline |
| Telenor ASA |
| Morrow Bank ASA |
Telenor ASA and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Morrow Bank
The main advantage of trading using opposite Telenor ASA and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor 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.| Telenor ASA vs. Orkla ASA | Telenor ASA vs. DnB ASA | Telenor ASA vs. Yara International ASA | Telenor ASA vs. Storebrand ASA |
| Morrow Bank vs. Grong Sparebank | Morrow Bank vs. Proximar Seafood AS | Morrow Bank vs. Nordic Mining ASA | Morrow Bank vs. Odfjell Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |