Correlation Between Bancroft Fund and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and MFS Municipal 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 Municipal 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 Municipal Income, you can compare the effects of market volatilities on Bancroft Fund and MFS Municipal 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 Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and MFS Municipal.
Diversification Opportunities for Bancroft Fund and MFS Municipal
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bancroft and MFS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income 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 Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Municipal Income has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and MFS Municipal go up and down completely randomly.
Pair Corralation between Bancroft Fund and MFS Municipal
Considering the 90-day investment horizon Bancroft Fund Limited is expected to generate 1.31 times more return on investment than MFS Municipal. However, Bancroft Fund is 1.31 times more volatile than MFS Municipal Income. It trades about 0.54 of its potential returns per unit of risk. MFS Municipal Income is currently generating about 0.2 per unit of risk. If you would invest 1,659 in Bancroft Fund Limited on August 31, 2024 and sell it today you would earn a total of 180.00 from holding Bancroft Fund Limited or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancroft Fund Limited vs. MFS Municipal Income
Performance |
| Timeline |
| Bancroft Fund Limited |
| MFS Municipal Income |
Bancroft Fund and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and MFS Municipal
The main advantage of trading using opposite Bancroft Fund and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, MFS Municipal 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 Municipal will offset losses from the drop in MFS Municipal'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 Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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