Correlation Between D Wave and Bancroft Fund

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Can any of the company-specific risk be diversified away by investing in both D Wave 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 D Wave and Bancroft Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between D Wave Quantum and Bancroft Fund, you can compare the effects of market volatilities on D Wave 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 D Wave with a short position of Bancroft Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of D Wave and Bancroft Fund.

Diversification Opportunities for D Wave and Bancroft Fund

QBTSBancroftDiversified AwayQBTSBancroftDiversified Away100%
-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between QBTS and Bancroft is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding D Wave Quantum and Bancroft Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancroft Fund and D Wave 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 D Wave Quantum 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 D Wave i.e., D Wave and Bancroft Fund go up and down completely randomly.

Pair Corralation between D Wave and Bancroft Fund

Given the investment horizon of 90 days D Wave Quantum is expected to generate 25.61 times more return on investment than Bancroft Fund. However, D Wave is 25.61 times more volatile than Bancroft Fund. It trades about 0.26 of its potential returns per unit of risk. Bancroft Fund is currently generating about -0.19 per unit of risk. If you would invest  100.00  in D Wave Quantum on October 15, 2024 and sell it today you would earn a total of  477.00  from holding D Wave Quantum or generate 477.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

D Wave Quantum  vs.  Bancroft Fund

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0200400600800
JavaScript chart by amCharts 3.21.15QBTS BCV-PA
       Timeline  
D Wave Quantum 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in D Wave Quantum are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, D Wave unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan124681012
Bancroft Fund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan22.52323.52424.5

D Wave and Bancroft Fund Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-43.49-32.57-21.65-10.740.012.024.4136.8349.2461.65 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15QBTS BCV-PA
       Returns  

Pair Trading with D Wave and Bancroft Fund

The main advantage of trading using opposite D Wave and Bancroft Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D Wave 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 D Wave Quantum 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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