Correlation Between Marsico Focus and Amg Renaissance

Can any of the company-specific risk be diversified away by investing in both Marsico Focus and Amg Renaissance 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 Amg Renaissance 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 Amg Renaissance Large, you can compare the effects of market volatilities on Marsico Focus and Amg Renaissance 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 Amg Renaissance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marsico Focus and Amg Renaissance.

Diversification Opportunities for Marsico Focus and Amg Renaissance

0.72

Correlation Coefficient

Marsico Focus  Amg Renaissance

Poor diversification

The 3 months correlation between Marsico and Amg is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Marsico Focus Fund and Amg Renaissance Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Renaissance Large 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 Amg Renaissance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Renaissance Large has no effect on the direction of Marsico Focus i.e., Marsico Focus and Amg Renaissance go up and down completely randomly.

Pair Corralation between Marsico Focus and Amg Renaissance

Assuming the 90 days horizon Marsico Focus Fund is expected to generate 0.67 times more return on investment than Amg Renaissance. However, Marsico Focus Fund is 1.48 times less risky than Amg Renaissance. It trades about 0.1 of its potential returns per unit of risk. Amg Renaissance Large is currently generating about -0.05 per unit of risk. If you would invest  2,939  in Marsico Focus Fund on September 20, 2024 and sell it today you would earn a total of  187.00  from holding Marsico Focus Fund or generate 6.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Marsico Focus Fund  vs.  Amg Renaissance Large

Marsico Focus

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico Focus Fund are ranked lower than 7 (%) 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.

Amg Renaissance Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Renaissance Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Amg Renaissance 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 Amg Renaissance

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

The idea behind Marsico Focus Fund and Amg Renaissance Large 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.