Correlation Between Distoken Acquisition and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition 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 Distoken Acquisition and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and Bancroft Fund Limited, you can compare the effects of market volatilities on Distoken Acquisition 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 Distoken Acquisition with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and Bancroft Fund.
Diversification Opportunities for Distoken Acquisition and Bancroft Fund
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Distoken and Bancroft is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition 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 Distoken Acquisition 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 Distoken Acquisition 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 Distoken Acquisition i.e., Distoken Acquisition and Bancroft Fund go up and down completely randomly.
Pair Corralation between Distoken Acquisition and Bancroft Fund
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 4.3 times less return on investment than Bancroft Fund. But when comparing it to its historical volatility, Distoken Acquisition is 1.82 times less risky than Bancroft Fund. It trades about 0.23 of its potential returns per unit of risk. Bancroft Fund Limited is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 1,663 in Bancroft Fund Limited on August 29, 2024 and sell it today you would earn a total of 184.00 from holding Bancroft Fund Limited or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distoken Acquisition vs. Bancroft Fund Limited
Performance |
| Timeline |
| Distoken Acquisition |
| Bancroft Fund Limited |
Distoken Acquisition and Bancroft Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and Bancroft Fund
The main advantage of trading using opposite Distoken Acquisition and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition 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.| Distoken Acquisition vs. Aurora Innovation | Distoken Acquisition vs. HUMANA INC | Distoken Acquisition vs. Aquagold International | Distoken Acquisition vs. Barloworld Ltd ADR |
| Bancroft Fund vs. Aurora Innovation | Bancroft Fund vs. HUMANA INC | Bancroft Fund vs. Aquagold International | Bancroft Fund vs. Barloworld Ltd ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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