Correlation Between Bancroft Fund and Highland Funds
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and Highland Funds 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 Bancroft Fund and Highland Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bancroft Fund and Highland Funds I, you can compare the effects of market volatilities on Bancroft Fund and Highland Funds 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 Bancroft Fund with a short position of Highland Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and Highland Funds.
Diversification Opportunities for Bancroft Fund and Highland Funds
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bancroft and Highland is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund and Highland Funds I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Funds I and Bancroft Fund 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 Bancroft Fund are associated (or correlated) with Highland Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Funds I has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and Highland Funds go up and down completely randomly.
Pair Corralation between Bancroft Fund and Highland Funds
Assuming the 90 days trading horizon Bancroft Fund is expected to generate 0.64 times more return on investment than Highland Funds. However, Bancroft Fund is 1.57 times less risky than Highland Funds. It trades about 0.09 of its potential returns per unit of risk. Highland Funds I is currently generating about -0.09 per unit of risk. If you would invest 2,179 in Bancroft Fund on September 25, 2024 and sell it today you would earn a total of 132.00 from holding Bancroft Fund or generate 6.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.21% |
Values | Daily Returns |
Bancroft Fund vs. Highland Funds I
Performance |
Timeline |
Bancroft Fund |
Highland Funds I |
Bancroft Fund and Highland Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bancroft Fund and Highland Funds
The main advantage of trading using opposite Bancroft Fund and Highland Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, Highland Funds 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 Highland Funds will offset losses from the drop in Highland Funds' long position.Bancroft Fund vs. The Gabelli Dividend | Bancroft Fund vs. GAMCO Global Gold | Bancroft Fund vs. The Gabelli Utility | Bancroft Fund vs. Ellsworth Growth and |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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