Correlation Between Bancroft Fund and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and OFS Credit 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 OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancroft Fund and OFS Credit, you can compare the effects of market volatilities on Bancroft Fund and OFS Credit 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 OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and OFS Credit.
Diversification Opportunities for Bancroft Fund and OFS Credit
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bancroft and OFS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and OFS Credit go up and down completely randomly.
Pair Corralation between Bancroft Fund and OFS Credit
Assuming the 90 days trading horizon Bancroft Fund is expected to under-perform the OFS Credit. In addition to that, Bancroft Fund is 1.21 times more volatile than OFS Credit. It trades about -0.04 of its total potential returns per unit of risk. OFS Credit is currently generating about 0.01 per unit of volatility. If you would invest 2,476 in OFS Credit on September 2, 2024 and sell it today you would earn a total of 2.00 from holding OFS Credit or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bancroft Fund vs. OFS Credit
Performance |
| Timeline |
| Bancroft Fund |
| OFS Credit |
Bancroft Fund and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and OFS Credit
The main advantage of trading using opposite Bancroft Fund and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit'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 |
| OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Utility | OFS Credit vs. Bancroft Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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