Correlation Between Bancroft Fund and RiverNorth Flexible

Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and RiverNorth Flexible 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 RiverNorth Flexible 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 RiverNorth Flexible Municipalome, you can compare the effects of market volatilities on Bancroft Fund and RiverNorth Flexible 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 RiverNorth Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and RiverNorth Flexible.

Diversification Opportunities for Bancroft Fund and RiverNorth Flexible

-0.12

Correlation Coefficient

Bancroft Fund  RiverNorth Flexible

Good diversification

The 3 months correlation between Bancroft and RiverNorth is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and RiverNorth Flexible Municipalo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Flexible 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 RiverNorth Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Flexible has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and RiverNorth Flexible go up and down completely randomly.

Pair Corralation between Bancroft Fund and RiverNorth Flexible

Considering the 90-day investment horizon Bancroft Fund Limited is expected to generate 1.18 times more return on investment than RiverNorth Flexible. However, Bancroft Fund is 1.18 times more volatile than RiverNorth Flexible Municipalome. It trades about 0.38 of its potential returns per unit of risk. RiverNorth Flexible Municipalome is currently generating about 0.04 per unit of risk. If you would invest  1,564  in Bancroft Fund Limited on September 3, 2024 and sell it today you would earn a total of  283.00  from holding Bancroft Fund Limited or generate 18.09% return on investment over 90 days.

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

Bancroft Fund Limited  vs.  RiverNorth Flexible Municipalo

Bancroft Fund Limited

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bancroft Fund Limited are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Bancroft Fund showed solid returns over the last few months and may actually be approaching a breakup point.

RiverNorth Flexible

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorth Flexible Municipalome are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, RiverNorth Flexible is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bancroft Fund and RiverNorth Flexible

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

The idea behind Bancroft Fund Limited and RiverNorth Flexible Municipalome 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.