Correlation Between Dodge Global and Marsico Global

Can any of the company-specific risk be diversified away by investing in both Dodge Global 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 Global 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, you can compare the effects of market volatilities on Dodge Global 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 Global with a short position of Marsico Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Global and Marsico Global.

Diversification Opportunities for Dodge Global and Marsico Global

-0.44

Correlation Coefficient

Dodge Global  Marsico Global

Very good diversification

The 3 months correlation between Dodge and Marsico is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Global Stock and Marsico Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico Global and Dodge Global 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 Global i.e., Dodge Global and Marsico Global go up and down completely randomly.

Pair Corralation between Dodge Global and Marsico Global

Assuming the 90 days horizon Dodge Global Stock is expected to under-perform the Marsico Global. In addition to that, Dodge Global is 2.16 times more volatile than Marsico Global. It trades about -0.14 of its total potential returns per unit of risk. Marsico Global is currently generating about 0.17 per unit of volatility. If you would invest  2,511  in Marsico Global on September 20, 2024 and sell it today you would earn a total of  247.00  from holding Marsico Global or generate 9.84% return on investment over 90 days.

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

Dodge Global Stock  vs.  Marsico Global

Dodge Global Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dodge Global Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Marsico Global

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Global are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Marsico Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dodge Global and Marsico Global

The main advantage of trading using opposite Dodge Global and Marsico Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Global 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 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.