Correlation Between Clough Global and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both Clough 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 Clough 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 Clough Global Ef and Bancroft Fund Limited, you can compare the effects of market volatilities on Clough 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 Clough Global with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clough Global and Bancroft Fund.
Diversification Opportunities for Clough Global and Bancroft Fund
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clough and Bancroft is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Clough Global Ef 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 Clough 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 Clough Global Ef 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 Clough Global i.e., Clough Global and Bancroft Fund go up and down completely randomly.
Pair Corralation between Clough Global and Bancroft Fund
Considering the 90-day investment horizon Clough Global is expected to generate 10.92 times less return on investment than Bancroft Fund. But when comparing it to its historical volatility, Clough Global Ef is 1.06 times less risky than Bancroft Fund. It trades about 0.05 of its potential returns per unit of risk. Bancroft Fund Limited is currently generating about 0.54 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clough Global Ef vs. Bancroft Fund Limited
Performance |
| Timeline |
| Clough Global Ef |
| Bancroft Fund Limited |
Clough Global and Bancroft Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clough Global and Bancroft Fund
The main advantage of trading using opposite Clough Global and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clough 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.| Clough Global vs. Allianzgi Convertible Income | Clough Global vs. MFS Investment Grade | Clough Global vs. Eaton Vance Senior | Clough Global vs. Stone Harbor Emerging |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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