Correlation Between Gabelli Dividend and Bancroft Fund

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

By analyzing existing cross correlation between The Gabelli Dividend and Bancroft Fund, you can compare the effects of market volatilities on Gabelli Dividend 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 Gabelli Dividend with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Dividend and Bancroft Fund.

Diversification Opportunities for Gabelli Dividend and Bancroft Fund

0.59

Correlation Coefficient

Gabelli Dividend  Bancroft Fund

Very weak diversification

The 3 months correlation between Gabelli and Bancroft is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Dividend and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund and Gabelli Dividend 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 The Gabelli Dividend 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 has no effect on the direction of Gabelli Dividend i.e., Gabelli Dividend and Bancroft Fund go up and down completely randomly.

Pair Corralation between Gabelli Dividend and Bancroft Fund

Assuming the 90 days trading horizon The Gabelli Dividend is expected to under-perform the Bancroft Fund. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Dividend is 1.27 times less risky than Bancroft Fund. The preferred stock trades about -0.26 of its potential returns per unit of risk. The Bancroft Fund is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  2,369  in Bancroft Fund on September 26, 2024 and sell it today you would lose (61.00) from holding Bancroft Fund or give up 2.57% of portfolio value over 90 days.

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

The Gabelli Dividend  vs.  Bancroft Fund

Gabelli Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gabelli Dividend is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Bancroft Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bancroft Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bancroft Fund is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Dividend and Bancroft Fund

The main advantage of trading using opposite Gabelli Dividend and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Dividend 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.

The idea behind The Gabelli Dividend and Bancroft Fund 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.