Correlation Between Blackrock Muniholdings and Bancroft Fund
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings 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 Blackrock Muniholdings and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Closed and Bancroft Fund Limited, you can compare the effects of market volatilities on Blackrock Muniholdings 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 Blackrock Muniholdings with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and Bancroft Fund.
Diversification Opportunities for Blackrock Muniholdings and Bancroft Fund
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Bancroft is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Closed 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 Blackrock Muniholdings 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 Blackrock Muniholdings Closed 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 Blackrock Muniholdings i.e., Blackrock Muniholdings and Bancroft Fund go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and Bancroft Fund
Considering the 90-day investment horizon Blackrock Muniholdings is expected to generate 1.62 times less return on investment than Bancroft Fund. But when comparing it to its historical volatility, Blackrock Muniholdings Closed is 2.0 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Bancroft Fund Limited on September 2, 2024 and sell it today you would earn a total of 377.00 from holding Bancroft Fund Limited or generate 25.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Closed vs. Bancroft Fund Limited
Performance |
| Timeline |
| Blackrock Muniholdings |
| Bancroft Fund Limited |
Blackrock Muniholdings and Bancroft Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and Bancroft Fund
The main advantage of trading using opposite Blackrock Muniholdings and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings 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.| Blackrock Muniholdings vs. John Hancock Income | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. DTF Tax Free |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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