Correlation Between Dodge Cox and Marsico Global

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

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

Diversification Opportunities for Dodge Cox and Marsico Global

0.46

Correlation Coefficient

Dodge Cox  Marsico Global

Very weak diversification

The 3 months correlation between Dodge and Marsico is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Marsico Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Global and Dodge Cox 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 Dodge Global Stock are associated (or correlated) with Marsico Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico Global has no effect on the direction of Dodge Cox i.e., Dodge Cox and Marsico Global go up and down completely randomly.

Pair Corralation between Dodge Cox and Marsico Global

Assuming the 90 days horizon Dodge Cox is expected to generate 10.28 times less return on investment than Marsico Global. But when comparing it to its historical volatility, Dodge Global Stock is 1.54 times less risky than Marsico Global. It trades about 0.02 of its potential returns per unit of risk. Marsico Global Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,378  in Marsico Global Fund on August 31, 2024 and sell it today you would earn a total of  229.00  from holding Marsico Global Fund or generate 9.63% return on investment over 90 days.

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

Dodge Global Stock  vs.  Marsico Global Fund

Dodge Global Stock

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Global Stock are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dodge Cox is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Marsico Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Global Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Marsico Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Dodge Cox and Marsico Global

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

The idea behind Dodge Global Stock and Marsico Global 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .