Correlation Between Bancroft Fund and GAMCO Natural
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and GAMCO Natural 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 GAMCO Natural 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 GAMCO Natural Resources, you can compare the effects of market volatilities on Bancroft Fund and GAMCO Natural 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 GAMCO Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and GAMCO Natural.
Diversification Opportunities for Bancroft Fund and GAMCO Natural
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bancroft and GAMCO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and GAMCO Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Natural Resources 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 GAMCO Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Natural Resources has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and GAMCO Natural go up and down completely randomly.
Pair Corralation between Bancroft Fund and GAMCO Natural
Considering the 90-day investment horizon Bancroft Fund Limited is expected to generate 0.93 times more return on investment than GAMCO Natural. However, Bancroft Fund Limited is 1.07 times less risky than GAMCO Natural. It trades about 0.14 of its potential returns per unit of risk. GAMCO Natural Resources is currently generating about 0.12 per unit of risk. If you would invest 1,298 in Bancroft Fund Limited on August 25, 2024 and sell it today you would earn a total of 515.00 from holding Bancroft Fund Limited or generate 39.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancroft Fund Limited vs. GAMCO Natural Resources
Performance |
| Timeline |
| Bancroft Fund Limited |
| GAMCO Natural Resources |
Bancroft Fund and GAMCO Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and GAMCO Natural
The main advantage of trading using opposite Bancroft Fund and GAMCO Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, GAMCO Natural 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 GAMCO Natural will offset losses from the drop in GAMCO Natural'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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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