Correlation Between Cepton and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both Cepton 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 Cepton and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Bancroft Fund, you can compare the effects of market volatilities on Cepton 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 Cepton with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Bancroft Fund.
Diversification Opportunities for Cepton and Bancroft Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cepton and Bancroft is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund and Cepton 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 Cepton Inc 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 has no effect on the direction of Cepton i.e., Cepton and Bancroft Fund go up and down completely randomly.
Pair Corralation between Cepton and Bancroft Fund
Given the investment horizon of 90 days Cepton Inc is expected to generate 1.15 times more return on investment than Bancroft Fund. However, Cepton is 1.15 times more volatile than Bancroft Fund. It trades about 0.04 of its potential returns per unit of risk. Bancroft Fund is currently generating about -0.07 per unit of risk. If you would invest 315.00 in Cepton Inc on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Cepton Inc or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cepton Inc vs. Bancroft Fund
Performance |
| Timeline |
| Cepton Inc |
| Bancroft Fund |
Cepton and Bancroft Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Bancroft Fund
The main advantage of trading using opposite Cepton and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton 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.The idea behind Cepton Inc and Bancroft Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bancroft Fund vs. Ellsworth Growth and | Bancroft Fund vs. The Gabelli Equity | Bancroft Fund vs. The Gabelli Utility | Bancroft Fund vs. GAMCO Global Gold |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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