Correlation Between Galenfeha and Bancroft Fund

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

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

Diversification Opportunities for Galenfeha and Bancroft Fund

-0.56

Correlation Coefficient

Galenfeha  Bancroft Fund

Excellent diversification

The 3 months correlation between Galenfeha and Bancroft is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Galenfeha and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund and Galenfeha 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 Galenfeha 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 Galenfeha i.e., Galenfeha and Bancroft Fund go up and down completely randomly.

Pair Corralation between Galenfeha and Bancroft Fund

Given the investment horizon of 90 days Galenfeha is expected to generate 216.45 times more return on investment than Bancroft Fund. However, Galenfeha is 216.45 times more volatile than Bancroft Fund. It trades about 0.13 of its potential returns per unit of risk. Bancroft Fund is currently generating about -0.2 per unit of risk. If you would invest  4.16  in Galenfeha on October 12, 2024 and sell it today you would earn a total of  370.84  from holding Galenfeha or generate 8914.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Galenfeha  vs.  Bancroft Fund

Galenfeha

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galenfeha are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Galenfeha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 latest weak performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Galenfeha and Bancroft Fund

The main advantage of trading using opposite Galenfeha and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galenfeha 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 Galenfeha 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.