Correlation Between Bancroft Fund and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and MFS Investment 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 MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancroft Fund Limited and MFS Investment Grade, you can compare the effects of market volatilities on Bancroft Fund and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and MFS Investment.
Diversification Opportunities for Bancroft Fund and MFS Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bancroft and MFS is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 Limited are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and MFS Investment go up and down completely randomly.
Pair Corralation between Bancroft Fund and MFS Investment
Considering the 90-day investment horizon Bancroft Fund Limited is expected to generate 1.71 times more return on investment than MFS Investment. However, Bancroft Fund is 1.71 times more volatile than MFS Investment Grade. It trades about 0.03 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.04 per unit of risk. If you would invest 1,598 in Bancroft Fund Limited on November 2, 2024 and sell it today you would earn a total of 234.00 from holding Bancroft Fund Limited or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bancroft Fund Limited vs. MFS Investment Grade
Performance |
| Timeline |
| Bancroft Fund Limited |
| MFS Investment Grade |
Bancroft Fund and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and MFS Investment
The main advantage of trading using opposite Bancroft Fund and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| Bancroft Fund vs. GAMCO Natural Resources | Bancroft Fund vs. RiverNorth Flexible Municipalome | Bancroft Fund vs. Brandywineglobal Globalome Opportunities | Bancroft Fund vs. Ameritrans Capital Corp |
| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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