Correlation Between Bancroft Fund and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and Gabelli Equity 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 Bancroft Fund and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancroft Fund and The Gabelli Equity, you can compare the effects of market volatilities on Bancroft Fund and Gabelli Equity 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 Bancroft Fund with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and Gabelli Equity.
Diversification Opportunities for Bancroft Fund and Gabelli Equity
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bancroft and Gabelli is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Bancroft Fund 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 Bancroft Fund are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and Gabelli Equity go up and down completely randomly.
Pair Corralation between Bancroft Fund and Gabelli Equity
Assuming the 90 days trading horizon Bancroft Fund is expected to generate 2.43 times more return on investment than Gabelli Equity. However, Bancroft Fund is 2.43 times more volatile than The Gabelli Equity. It trades about -0.01 of its potential returns per unit of risk. The Gabelli Equity is currently generating about -0.03 per unit of risk. If you would invest 2,262 in Bancroft Fund on November 9, 2024 and sell it today you would lose (7.00) from holding Bancroft Fund or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancroft Fund vs. The Gabelli Equity
Performance |
| Timeline |
| Bancroft Fund |
| Gabelli Equity |
Bancroft Fund and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and Gabelli Equity
The main advantage of trading using opposite Bancroft Fund and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, Gabelli Equity 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 Gabelli Equity will offset losses from the drop in Gabelli Equity's long position.| Bancroft Fund vs. Ellsworth Growth and | Bancroft Fund vs. The Gabelli Equity | Bancroft Fund vs. The Gabelli Utility | Bancroft Fund vs. GAMCO Global Gold |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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