Correlation Between Morrow Bank and Horisont Energi

Can any of the company-specific risk be diversified away by investing in both Morrow Bank and Horisont Energi 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 Horisont Energi 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 Horisont Energi AS, you can compare the effects of market volatilities on Morrow Bank and Horisont Energi 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 Horisont Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morrow Bank and Horisont Energi.

Diversification Opportunities for Morrow Bank and Horisont Energi

0.0

Correlation Coefficient

Morrow Bank  Horisont Energi

Pay attention - limited upside

The 3 months correlation between Morrow and Horisont is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Morrow Bank ASA and Horisont Energi AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horisont Energi AS 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 Horisont Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horisont Energi AS has no effect on the direction of Morrow Bank i.e., Morrow Bank and Horisont Energi go up and down completely randomly.

Pair Corralation between Morrow Bank and Horisont Energi

If you would invest  418.00  in Morrow Bank ASA on October 25, 2024 and sell it today you would earn a total of  488.00  from holding Morrow Bank ASA or generate 116.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Morrow Bank ASA  vs.  Horisont Energi AS

Morrow Bank ASA

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Morrow Bank ASA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Morrow Bank disclosed solid returns over the last few months and may actually be approaching a breakup point.

Horisont Energi AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Horisont Energi AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Horisont Energi is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Morrow Bank and Horisont Energi

The main advantage of trading using opposite Morrow Bank and Horisont Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morrow Bank position performs unexpectedly, Horisont Energi 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 Horisont Energi will offset losses from the drop in Horisont Energi's long position.

The idea behind Morrow Bank ASA and Horisont Energi AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.