Correlation Between Bancroft Fund and Biotechnology Ultrasector
Can any of the company-specific risk be diversified away by investing in both Bancroft Fund and Biotechnology Ultrasector 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 Biotechnology Ultrasector 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 Biotechnology Ultrasector Profund, you can compare the effects of market volatilities on Bancroft Fund and Biotechnology Ultrasector 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 Biotechnology Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bancroft Fund and Biotechnology Ultrasector.
Diversification Opportunities for Bancroft Fund and Biotechnology Ultrasector
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bancroft and Biotechnology is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bancroft Fund Limited and Biotechnology Ultrasector Prof in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotechnology Ultrasector 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 Biotechnology Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotechnology Ultrasector has no effect on the direction of Bancroft Fund i.e., Bancroft Fund and Biotechnology Ultrasector go up and down completely randomly.
Pair Corralation between Bancroft Fund and Biotechnology Ultrasector
Considering the 90-day investment horizon Bancroft Fund is expected to generate 5.13 times less return on investment than Biotechnology Ultrasector. But when comparing it to its historical volatility, Bancroft Fund Limited is 1.66 times less risky than Biotechnology Ultrasector. It trades about 0.09 of its potential returns per unit of risk. Biotechnology Ultrasector Profund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,398 in Biotechnology Ultrasector Profund on September 12, 2025 and sell it today you would earn a total of 1,090 from holding Biotechnology Ultrasector Profund or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bancroft Fund Limited vs. Biotechnology Ultrasector Prof
Performance |
| Timeline |
| Bancroft Fund Limited |
| Biotechnology Ultrasector |
Bancroft Fund and Biotechnology Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bancroft Fund and Biotechnology Ultrasector
The main advantage of trading using opposite Bancroft Fund and Biotechnology Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancroft Fund position performs unexpectedly, Biotechnology Ultrasector 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 Biotechnology Ultrasector will offset losses from the drop in Biotechnology Ultrasector's long position.| Bancroft Fund vs. Western Asset Mortgage | Bancroft Fund vs. Gabelli MultiMedia Mutual | Bancroft Fund vs. Royce Dividend Value | Bancroft Fund vs. Dunham Monthly Distribution |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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