Correlation Between CBH and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both CBH and Bancroft Fund 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 CBH and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and Bancroft Fund Limited, you can compare the effects of market volatilities on CBH and Bancroft Fund 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 CBH with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Bancroft Fund.
Diversification Opportunities for CBH and Bancroft Fund
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBH and Bancroft is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Bancroft Fund Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund Limited and CBH 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 CBH are associated (or correlated) with Bancroft Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancroft Fund Limited has no effect on the direction of CBH i.e., CBH and Bancroft Fund go up and down completely randomly.
Pair Corralation between CBH and Bancroft Fund
Considering the 90-day investment horizon CBH is expected to generate 3.85 times more return on investment than Bancroft Fund. However, CBH is 3.85 times more volatile than Bancroft Fund Limited. It trades about 0.06 of its potential returns per unit of risk. Bancroft Fund Limited is currently generating about 0.03 per unit of risk. If you would invest 837.00 in CBH on November 2, 2024 and sell it today you would earn a total of 958.00 from holding CBH or generate 114.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 79.15% |
| Values | Daily Returns |
CBH vs. Bancroft Fund Limited
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bancroft Fund Limited |
CBH and Bancroft Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and Bancroft Fund
The main advantage of trading using opposite CBH and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, Bancroft Fund 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 Bancroft Fund will offset losses from the drop in Bancroft Fund's long position.| CBH vs. Eaton Vance National | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select | CBH vs. MFS Investment Grade |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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