Correlation Between Marsico Focus and Aston Montag

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

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

Diversification Opportunities for Marsico Focus and Aston Montag

0.95

Correlation Coefficient

Marsico Focus  Aston Montag

Almost no diversification

The 3 months correlation between Marsico and Aston is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus Fund and Aston Montag Caldwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Montag Caldwell and Marsico Focus 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 Marsico Focus Fund are associated (or correlated) with Aston Montag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Montag Caldwell has no effect on the direction of Marsico Focus i.e., Marsico Focus and Aston Montag go up and down completely randomly.

Pair Corralation between Marsico Focus and Aston Montag

Assuming the 90 days horizon Marsico Focus Fund is expected to generate 1.19 times more return on investment than Aston Montag. However, Marsico Focus is 1.19 times more volatile than Aston Montag Caldwell. It trades about 0.12 of its potential returns per unit of risk. Aston Montag Caldwell is currently generating about 0.08 per unit of risk. If you would invest  2,056  in Marsico Focus Fund on September 12, 2024 and sell it today you would earn a total of  1,142  from holding Marsico Focus Fund or generate 55.54% return on investment over 90 days.

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

Marsico Focus Fund  vs.  Aston Montag Caldwell

Marsico Focus

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Focus Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Marsico Focus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aston Montag Caldwell

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aston Montag Caldwell are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Aston Montag is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Marsico Focus and Aston Montag

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

The idea behind Marsico Focus Fund and Aston Montag Caldwell 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.