Correlation Between GAMCO Global and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both GAMCO Global 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 GAMCO Global and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Global Gold and Bancroft Fund, you can compare the effects of market volatilities on GAMCO Global 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 GAMCO Global with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Bancroft Fund.
Diversification Opportunities for GAMCO Global and Bancroft Fund
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAMCO and Bancroft is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund and GAMCO Global 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 GAMCO Global Gold 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 GAMCO Global i.e., GAMCO Global and Bancroft Fund go up and down completely randomly.
Pair Corralation between GAMCO Global and Bancroft Fund
Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Bancroft Fund. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.57 times less risky than Bancroft Fund. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Bancroft Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,260 in Bancroft Fund on November 25, 2024 and sell it today you would earn a total of 10.00 from holding Bancroft Fund or generate 0.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GAMCO Global Gold vs. Bancroft Fund
Performance |
Timeline |
GAMCO Global Gold |
Bancroft Fund |
GAMCO Global and Bancroft Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMCO Global and Bancroft Fund
The main advantage of trading using opposite GAMCO Global and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global 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.GAMCO Global vs. The Gabelli Equity | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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