Correlation Between Bancroft Fund and Associated Capital

Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and Associated Capital 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 Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bancroft Fund Limited and Associated Capital Group, you can compare the effects of market volatilities on Bancroft Fund and Associated Capital 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 Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and Associated Capital.

Diversification Opportunities for Bancroft Fund and Associated Capital

0.59

Correlation Coefficient

Bancroft Fund  Associated Capital

Very weak diversification

The 3 months correlation between Bancroft and Associated is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital 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 Limited are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and Associated Capital go up and down completely randomly.

Pair Corralation between Bancroft Fund and Associated Capital

Considering the 90-day investment horizon Bancroft Fund Limited is expected to under-perform the Associated Capital. But the stock apears to be less risky and, when comparing its historical volatility, Bancroft Fund Limited is 1.84 times less risky than Associated Capital. The stock trades about -0.03 of its potential returns per unit of risk. The Associated Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,536  in Associated Capital Group on December 29, 2024 and sell it today you would earn a total of  273.00  from holding Associated Capital Group or generate 7.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bancroft Fund Limited  vs.  Associated Capital Group

Bancroft Fund Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bancroft Fund Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Bancroft Fund is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Associated Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Associated Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bancroft Fund and Associated Capital

The main advantage of trading using opposite Bancroft Fund and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.

The idea behind Bancroft Fund Limited and Associated Capital Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.